Woodside's 1Q 2016 Sales Revenue Down 30.3% to $982M

Australia's Woodside Petroleum Ltd. posted a 30.3. percent decline in sales revenue for first quarter 2016 (1Q 2016) to $982 million, compared to $1.408 billion a year ago, with the fall attributed to lower global oil and gas prices, according to financial results released by the company Wednesday.

The decline in sales revenue occurred despite higher sales volume during the quarter, up 1.3 percent in 1Q 2016 to 24.2 million barrels of oil equivalent (MMboe) from last year's 23.9 MMboe, while production climbed 8.7 percent to 23.7 MMboe from 21.8 MMboe in the corresponding period.

Woodside said the increased production was predominantly due to higher output at Pluto LNG (liquefied natural gas) development although this was partially offset by lower oil volumes from the North West Shelf (NWS) oil asset as a result of planned maintenance.

Despite the current industry operating environment, Woodside is progressing well with its low-cost, high-value growth strategy.

“We are taking advantage of market conditions and applying latest technology to reduce life cycle costs further enhancing our position as a low cost operator. This will also improve project concepts to deliver a portfolio of globally competitive decision-ready projects,” Woodside CEO Peter Coleman said in the press release.

Meantime, Woodside and its joint venture (JV) partners for Australia's offshore Browse project are still working on a "new work program and budget to progress development activities" after last month's announcement that following completion of front end engineering and design (FEED) work, the Browse JV participants "had decided not to proceed with the reference case for a three floating LNG (FLNG) facility development at this time in view of the current economic and market environment."

"It is anticipated that during the next phase, the additional time will be used to pursue further capital efficiencies for the development. Woodside remains committed to the earliest commercial development of the world-class Browse resources and to FLNG as the preferred solution, but the economic environment is not supportive of a major LNG investment at this time," the firm said in the press release.

On the Wheatstone project, field operator Chevron is targeting first LNG in mid-2017. In a related development, Woodside has installed two subsea manifolds for the company's operated Julimar Project during 1Q 2016 and the development is on track to commence operations on budget and schedule in the second half of this year.

The firm has also submitted the final field development plan for the development and production license application for Laverda, which is a part of the Greater Enfield Development, to the National Offshore Petroleum Titles Administrator.

Over in the NWS, the first phase of the drilling campaign for the Persephone Project was completed. The project, which continues to progress platform modifications and fabrication of key subsea infrastructure including completing the manifold, is expected to start-up in early 2018.

Woodside said the Greater Western Flank Phase 2 Project completed its transition to the execute phase, with the award of the remaining major contract packages and the continuation of the manufacture and fabrication of key project infrastructure. Elsewhere, FEED activities for the Lambert Deep project are being finalized to enable incorporation of results from the Fortuna seismic survey to support consideration of a final investment decision in 2H 2016.

Turning to exploration activities offshore Myanmar, Woodside said extensive 2D and 3D seismic surveys (including gravity and magnetic data acquisition) over Blocks A-4, A-7, AD-2 and AD-5 commenced in late 2015 and will continue into 2Q 2016. Seabed coring programs in Blocks A-4 and A-7 commenced in March 2016, and will continue through to May 2016.

The firm further revealed that the acquisition of additional 3D seismic surveys over Myanmar's offshore Blocks A-6 and AD-7 has been approved, while the acquisition of 463 square miles (1,200 square kilometers) of data has commenced in AD-7. Woodside will also begin to acquire 695 square miles (1,800 square kilometers) of data in A-6 in April 2016, which will be a continuation of the A-7 and AD-5 3D survey.

Chee Yew has covered the upstream and downstream sectors of the oil and gas industry in Asia for more than 15 years. Email Chee Yew at cheeyew.cheang@rigzone.com

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