Australia’s largest independent oil and gas company, Woodside Petroleum Ltd [ASX:WPL] is still feeling the pain from lower oil and gas prices.
Third quarter 2020 results showed Woodside produced 25.3 MMboe and sold 26.7 MMboe. That is a 2% and 10% increase respectively from the same quarter last year.
Yet sales revenue was $699 million, down a whopping 42% from this same period last year and 9% from the previous quarter.
The main culprits are lower prices. The company received an average realised price of US$26 per barrel oil for the quarter, as you can see below. That’s close to a 50% drop from the US$50 it got in the same period last year:
Source: Woodside Petroleum
Year-to-date production stands at 75.4 MMboe, an 18% increase from the first three quarters in 2019. But again, sales revenues are down year-to-date by 25% compared to the same period last year.
Woodside CEO Peter Coleman remains optimistic, saying:
‘As expected, sales revenue in the third quarter was impacted by lower realised LNG prices, reflecting the oil price lag in many of our contracts. Pricing in the fourth quarter and in Q1 2021 is expected to be stronger given the improvement in oil price in recent months. In particular, I am encouraged by the strengthening Asian LNG spot price, which is now above $6.50/MMBtu for December deliveries.’
Woodside had to write-down a total of US$4.37 billion, with US$3.92 billion of it in oil and gas properties and exploration assets earlier this year.
What could happen next for the WPL share price?
The market didn’t take the news too well. The WPL share price is down over 1.5% today, trading at $18.29 at time of writing. Year-to-date shares are down by over 46%.
With the pandemic still hitting global demand and the likelihood of new lockdowns on the way, it doesn’t look like prices will be recovering soon.
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