Woodside Petroleum Sales Decline 7% After Oil Project Delay

Jan 16, 2014 2:40 am ET

(Updates to add shares in fifth paragraph.)

Jan. 16 (Bloomberg) -- Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, posted a 7 percent decline in fourth-quarter sales after a delay in restarting its Vincent oil project off the west coast.

Sales dropped to $1.65 billion from $1.77 billion a year earlier, which exceeded the median estimate of $1.58 billion from three analysts surveyed by Bloomberg owing to higher LNG prices. Production dropped 5 percent to 23.2 million barrels of oil equivalent, close to the median estimate of 23 million barrels, Perth-based Woodside said today in a statement.

Woodside cut its 2013 production target in July after an unplanned shutdown at its A$15 billion ($13.4 billion) Pluto liquefied natural gas plant in Western Australia and delays to the refurbishment of the Vincent floating production storage and offloading vessel. Both projects are back in operation.

The shares rose 2.7 percent to A$38.63 in Sydney trading, the most in six months. Australia’s benchmark S&P/ASX 200 Index rose 1.2 percent.

Woodside had output of 87 million barrels for the full year. Last month, the company narrowed its range for expected 2013 production to 86 million to 88 million barrels.

It expects writedowns for 2013 of $380 million to $400 million to reflect the value of some of its oil and gas projects, it said today.

Woodside and its partners in the Browse floating LNG venture will consider starting the engineering and design phase in the second half of 2014, the company said today.

Mark Greenwood, a Sydney-based analyst at Citigroup Inc., yesterday raised his cost estimate to develop Browse to $52 billion over the life of the project, compared with his previous estimate of $45 billion.

--Editors: Andrew Hobbs, Peter Langan