Woodside Petroleum has beaten its full year production forecast after oil assets performed strongly, while high prices boosted revenue by 15 per cent.
Shares in the company were sold down, however, closing 1.85 per cent weaker at $33.48.
IG Markets institutional dealer Chris Weston said investors appeared to be nervous about risks surrounding Woodside’s growth projects in liquefied natural gas (LNG), including Pluto Stage 2 and Browse in Western Australia, and Sunrise in the Timor Sea.
Mr Weston said the market was looking for more evidence of progress on these planned developments after delays on all three.
Woodside’s 2011 production results were reasonably good, he said.
Full year oil and gas production totalled 64.6 million barrels of oil equivalent (mmboe), eclipsing Woodside’s full year production forecast of 62-64 mmboe.
Woodside said production was better than forecast because there were fewer than expected cyclones in WA’s Pilbara region, where it operates the North West Shelf (NWS) gas processing facility.
However production volumes fell 11 per cent compared to 2010.
“Less than one third of this change was due to natural field decline from Woodside-operated fields,” the company said in a statement on Thursday.
The remainder was due to one-off factors including divestments, expired contracts, shut-ins during project redevelopments, and higher planned maintenance and weather-related events.
Chief executive Peter Coleman described the result as solid, saying the NWS continued to be an outstanding performer.
Fat Prophets industrial analyst Greg Fraser said the strong oil price had offset the effect of lower year-on-year production.
Woodside said the NWS achieved record annual revenue of almost $US3 billion ($A2.88 billion), representing the vast majority of the company’s total revenue of $US4.8 billion ($A4.61 billion), which rose 15 per cent.
Driving the revenue surge was a 41 per cent increase in the average realised oil price to $US113.80 per barrel.
Woodside also said commissioning was underway at the $US14.9 billion ($A14.32 billion) Pluto Stage 1 development next to the NWS, near Karratha.
IG Market’s Mr Weston said a big positive was the company saying no material change was expected to its forecast first cargo target date of March for Pluto.
Woodside continues talks with other energy producers in the region about buying gas to help underpin an expansion of Pluto, given it has not yet found enough gas in the project area to develop a second processing “train”.
Mr Fraser said it was only a matter of time before Woodside was successful in finding more gas or sealing a deal for Pluto Train 2.
While the production report contained no surprises, Mr Fraser said he was concerned about the progress of the $US30 billion ($A28.84 billion) Browse project in WA’s Kimberley region.
Woodside in December said a final decision to proceed with Browse – a joint venture comprising BHP Billiton, BP, Chevron and Shell – would likely be delayed by up to a year.
Mr Fraser said Woodside was under pressure because it needed the WA government to amend a condition of its retention leases, whereby it must decide whether to proceed with the project by mid-2012.
The company believes an extension into the first half of 2013 may be required.
Woodside reiterated its 2012 production target range of 73-81 mmboe, including 17-21 mmboe from the first stage of Pluto.
