Production for the first half of 2004 was down to 28 million barrels of oil equivalent (boe) with the company admitting that a strong second term would be needed to reach the forecasted target of 58 million boe.
The market responded to the news by selling Woodside down to close at $17.27, after opening the day at $17.50. Three days earlier WPL had marked its highest trades ever - $17.70.
Broker ABN Amro said this result marked the low point in the production downtrend and said the company could now look forward to a five year production uptrend. It placed an add recommendation on the stock.
Lower than expected domestic gas production from the North West Shelf and oil production from the Cossack Pioneer oil field were the main detractors from the overall figures while LNG and condensate production did manage an increase due to higher than expected customer demand.
Production from Laminaria and Corallina was also below expectation at 32,363 barrels per day (bopd) due to a lower than expected result from the Corallina-2 side track workover in January this year. This result will be compounded by a 10-day shutdown for maintenance between 25 June and 7 July.
Legendre production was above expectation at 20,015 bopd, due to the drilling and successful commissioning of the infill well, LN5H.
Woodside said it would now be focussing on 2006 when a number of major new projects in Australia and overseas are due to come online after the company received relevant approvals in the first half of the year.
During the last quarter the Thylacine-Geographe Otway gas project (offshore Victoria) and the Chinguetti oil project (offshore Mauritania, West Africa) were approved to proceed to development, while the Enfield oil project offshore Western Australia was approved for development in the previous quarter.
First production is expected from Chinguetti by March 2006, from Otway by mid-2006 and from Enfield by fourth quarter 2006.
Additionally first gas has begun flowing into the North West Shelf’s Train 4 LNG plant with the construction phase all but finished. The phased commissioning was nearly 90% complete meaning the LNG expansion project is on target to meet delivery obligations to customers with LNG run-down to storage tanks from Train 4 expected by September/October 2004.
