Woodside Petroleum’s Pluto LNG project has proved to be a bright spot in the company’s third-quarter (Q3) results, underpinning a boost in production volumes which helped offset the impact of lower oil prices on revenue.
The Perth, Western Australia-headquartered company produced 25.3 million barrels of oil equivalent (MMboe) for Q3 2015, representing a 25.9 percent rise on the result achieved during second-quarter (Q2) 2015.
Woodside attributed the improved result to higher LNG and associated condensate volumes at Pluto of 1.15 million tonnes, following the completion of a major turnaround in Q2 and higher oil volumes from Vincent, following a full quarter of production from the Phase IV in-fill well.
Higher production contributed to a 23.6 percent increase in sales volumes, while sales revenue jumped 20.9 percent from Q2 to US $1.09 billion. Revenue, however, was down 44.6 percent year-on-year due to lower realized oil prices.
During Q3, Woodside approved the front-end engineering and design phase for its Greater Enfield Development in the Carnarvon Basin off Northern Western Australia.
This was followed by the awarding of key contracts for subsea hardware, FPSO modifications engineering and procurement, shipyard support and geophysical and geotechnical surveys.
The proposed development is targeting an FID in the second half of 2016.
Over at the Greater Western Flank phase 1 project, subsea installation and pipeline pre-commissioning activities were completed and commissioning activities commenced to enable project start-up. Woodside said the project remained on budget with first gas expected ahead of schedule in late 2015.
The company also completed initial resource evaluation for the Pyxis-1 gas discovery, located in production license WA-34-L, resulting in the addition of 68 MMboe of 2C net contingent recoverable resources.
On the marketing front, Woodside has now put in place equity lifting transitional arrangements for the North West Shelf project which has resulted in the company selling four NWS cargoes directly to its LNG trading customers. Concurrently, Woodside is continuing to progress marketing activities for the proposed Browse FLNG development.
Post quarter, Woodside announced it had lobbed a confidential and non-binding proposal to merge with Oil Search through a scheme of arrangement.
Since the proposal, which was swiftly turned down by Oil Search, Woodside has not sweetened its offer and has yet to disclose if it plans to do so. Woodside said it would continue to maintain a disciplined approach in relation to business development opportunities.
Woodside has revised its full-year production target guidance from 86-94 MMboe to 88-93 MMboe. The upward narrowing of the production range is a result of Pluto’s strong performance and delays with its Canadian pipeline gas.
Woodside shares jumped 1.3 percent to $31.26.
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