Woodside's 4Q 2015 Output Up 6.4%, Revenue Falls 37.3% on Lower Oil Prices

Australia's Woodside Petroleum Ltd. posted a 6.4 percent gain in production in fourth quarter 2015 (4Q 2015) to 24.9 million barrels of oil equivalent (MMboe), up from 23.4 MMboe in the previous year, with the increase attributed to production from the Balnaves oil field and higher liquefied natural gas (LNG) and condensate volumes from the Pluto gas development due to higher plant reliabilty, the firm's quarterly results revealed Thursday.

While sales volume rose to 25.2 MMboe in 4Q 2015, up 4.6 percent from 24.1 MMboe last year, sale revenue declined 37.3 percent in the same period to $1.105 billion from $1.762 billion, reflecting lower realized prices across the company's portfolio.

Woodside's production target range for 2016 is between 86 MMboe and 93 MMboe, compared to 92.2 MMboe for 2015 which was the second highest level recorded by the company after 2014's 95.1 MMboe. Pluto LNG is expected to contribute 42 percent of the 2016 production, while North West Shelf (NWS) LNG, NWS pipeline natural gas (PNG), condensate, oil and liquefied petroleum gas and Canadian PNG will provide 25 percent, 14 percent, 18 percent and 1 percent, respectively.

The company allocated an estimated $1.96 billion for investment expenditure (exploration and capital) for 2016. Woodside however pointed out that the amount excluded post final investment decision (FID) expenditure for the Browse floating LNG (FNLG) project offshore Western Australia.

The Australian firm added that "following the biannual review of the Company's asset values and reflecting lower short and long term oil price assumptions, impairment charges for full-year 2015 are anticipated to be in the range of $1,000 million to $1,200 million pre-tax."

On its development projects, front end engineering and design (FEED) work is continuing for the Browse project, including commercialization, timing and sequencing of the FLNG development required to support a FID in the second half of this year.

Elsewhere, the Wheatstone and Julimar Projects are more than 65 percent and 80 percent complete, respectively, with the latter expected to come online in the second half of 2016. The firm has submitted the preliminary field development plan for Greater Enfield to the government for approval, with FID targeted for late 2016.

Turning to the NWS development, drilling at the Persephone field commenced in the quarter, with the project scheduled for operations in early 2018, while first gas from the Greater Western Flank Phase 2 Project, which gained approval for development in December, is expected to commence in the second half of 2019. Woodside added that FEED activities for the Lambert Deep project is continuing to support a planned FID in the first half of this year.

In an update on its exploration activities, Woodside indicated that planning is underway to drill two oil targets in permit WA-472-P in the Beagle Sub-basin off Western Australia. The company confirmed that results of the Hongge-1 prospect drilled late last year offshore South Korea has resulted in a non-commercial discovery.

Over in Myanmar, where Woodside made a gas find at Shwe Yee Htun-1 exploration well in Block A-6 in then Rakhine Basin earlier this month, the firm has spud the Thalin-1 well in Block AD-7 Jan. 20. Extensive 2D and 3D seismic surveys are underway over Blocks A-4,A-7, AD-2 and AD-5 and will continue into 2Q 2016.