Oil miner Woodside Petroleum (ASX: WPL) have released their Q42015 report to the market, showing relatively sustained production volumes, whilst having significantly lower revenue figures.
Woodside’s production volumes remained relatively stable for Q42015, falling 1.6%, to 24.9 MMboe, when compared to Q32015. This was partially justified by Woodside, in response to lower volumes from the Balnaves oil asset, due to natural reservoir decline. However, when compared to the pcp in 2014, there was a 6.4% expansion in production.
Full year production for 2015 was somewhat stable, however it dropped 3% when compared to 2014, to 92.2MMboe. Woodside’s 2016 production outlook is between 86-93MMboe.
Woodside’s revenue was overall, significantly lower, as the company cited the dramatic slump in crude oil prices as the primary factor.
Q42015 revenue increased, when compared to Q32015, by 1.7%, to $US1.105 billion, citing the increase in sales volume by 4.6%. The company linked the rise in sales volumes to the timing of shipments.
Although on the contrary, the full ramifications of slumping oil prices is felt by Woodside, when comparing figures to 2014. Q42015 revenue decreased by 37%, compared to Q42014. Moreover, full year revenue for 2015 was $US4.4 billion, being 36% lower, when compared to 2014.
Woodside CEO Peter Coleman remains optimistic with their performance in this low oil price environment. “The recent significant fall in oil and gas prices has highlighted the quality of our low cost production and approach to balance sheet risk management.”
Exploration and Development
Woodside has remained relatively consistent, in regards to their exploration and development, with a multitude of projects being in the works. The Wheatstone project (Non-Operated), is more than 65% complete. Along with the Julimar project (Woodside-Operated), which is more than 80% complete.
Moreover, Woodside is aiming to drill several targets in Australia, along with further exploring in countries such as Morocco, Canada, Myanmar, New Zealand and more.
Consistent with established practice, the final dividend is likely to be adjusted for impairments, along with other one-off material non-cash changes. The final dividend is subject to board approval.
Despite the rather disappointing announcement, WPL has, as at 11.44am, increased 0.24%, to $25.54. However, WPL has contracted almost 12% for the year, due to the ongoing slump in oil prices.
Author: Matthew Dibb
Jan 21, 2016
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.