Unplanned outage hits Woodside’s bottom line

Woodside have announced a revenue drop in the second quarter of the year as unexpected outages lowered production.

Woodside’s revenue of $US1.3 billion ($1.4bn) for the June quarter was down 6 per cent from a year ago, with the company also announcing it expects its half year earnings to include up to $US140 million ($A152.26 million) in writedowns.

Production of 20 million barrels of oil equivalent for the period was down slightly from this time last year, but was down 8.6 per cent from the previous quarter.

Lower production resulted from planned maintenance at the company’s Pluto LNG plant and North West Shelf Project, both in WA.

However an unplanned shutdown at Pluto after a technical glitch hit production with the company now expecting output for the year to Dec. 31 to range between 85 million and 89 million barrels of oil equivalent compared with a previous guidance of between 88 million and 94 million.

It also said a scheduled refurbishment of an offshore storage and offloading vessel was taking longer than expected, adding to production downgrades. Woodside said production at the site would recommence in October.

Morningstar analyst Mark Taylor said the report suggested the company had received higher than expected gas prices over the quarter, reported.

Taylor said this was good news for investors, noting that predictions of gas exports out of North America putting downward pressure on LNG prices has not yet materialised.

"A lot of the issues with gas companies weakening of late has been concern over US shale gas and that it might impact Australian exports into Asia," he said.

"Then they've (Woodside) come out this quarter with fairly healthy gas prices so that is saying that the threat of US gas prices hasn't affected the market as yet."

Analysts at Macquarie Securities found the average sales price LNG out of Pluto was around $US9.70 per unit, compared with an average of $US8.20 to $US8.30 a unit previously, The Australian reported.

In May Woodside announced plans to restart gas exploration as part of a plan to expand its $15 billion flagship Pluto project.

The company said it will implement two drill rigs to explore waters near Pluto in early 2014, targeting up to eight natural gas prospects.

While earlier this year the company scrapped plans to develop their $45 billion Browse development hub at James Price Point.

The company have instead opted to develop the gas through floating LNG.

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