Woodside Petroleum Ltd [ASX:WPL] is the latest feeling the pain from the shift happening in energy markets. Oil prices collapsed during the pandemic after global demand collapsed.
Woodside Petroleum is Australia’s largest independent oil and gas company.
Today the company announced their second quarter 2020 results. Sales revenues for the period dropped by close to 29%, from US$1,076 to US$768 million.
Woodside CEO Peter Coleman said:
‘I am proud of the way the Woodside team has responded to unprecedented challenges in this half: managing the impact of Tropical Cyclone Damien; ensuring the safety of our people and business integrity as the COVID-19 pandemic unfolded; and adapting to the lower commodity price environment. […]
‘The upshot of this sustained organisational effort has been our best-ever operating results, achieved in a time of extraordinary uncertainty and exemplifying the strength and resilience of our people and business.’
The latest in a string of industry asset write-downs
The company had already warned yesterday they were writing down a total of US$4.37 billion, with US$3.92 billion of it in oil and gas properties and exploration assets.
The culprit, for 80% of the impairment losses in oil and gas properties, as the company said, is the drop in the prices of oil and natural gas.
What could happen next?
The share price for Woodside Petroleum Ltd [ASX:WPL] is down close to 2.24% today and have dropped over 38% from this same time last year. At time of writing shares are trading at $20.94.
Woodside also said production has started to recover in the second quarter, with a 7% increase from the first quarter.
But, with the pandemic still hitting global demand, changes in working and transport patterns, and the likelihood of new lockdowns on the way, it doesn’t look like oil prices will be recovering soon.
That’s why we think there are better investments out there.
Check out editor Greg Canavan’s new report: ‘Five Bounce Back Stocks to Consider during the Market Crash’. In this free report, Greg gives you five stocks he believes will survive the pandemic, no matter how what way it plays out.
You can access this free report here.
For The Rum Rebellion