The Woodside Petroleum Ltd (ASX: WPL) share price is sliding today after the oil and gas company released its 2020 full-year results. Woodside is Australia’s largest LNG (liquefied natural gas) producer.
The last 12 months have been disappointing for Woodside shareholders, with the share price declining more than 20% over this time.
WPL share price
What did Woodside report?
Despite Woodside achieving record full production for 2020 of 100.3 million barrels of oil equivalent (BOE), the group reported a net loss after tax of US$4.03 billion (AUD$5.19 billion).
The result was heavily impacted by non-cash impairments of US$3.92 billion (post-tax) and the onerous contract provision relating to its Corpus Christi project.
Operating revenue fell 26% to US$3.60 billion, while operating cash flow dropped 44% to US$1.85 billion.
Woodside advised its unit production cost for each BOE in 2020 was US$4.80, down from US$5.70 in the prior corresponding period (pcp). This was driven by a reduced turnaround in activity in 2020, a full-year of Ngujima-Yin production, and the deferral of some maintenance into 2021 as part of the company’s response to COVID-19.
Woodside ended the year with cash on hand of US$3.6 billion, liquidity of US$6.7 billion and gearing of 24.4%.
Woodside’s final dividend
Woodside confirmed it will pay a final dividend of US$0.12 per share to shareholders on 24 March 2021. At the current exchange rate, this works out to be around AUD$0.15. The ex-dividend date is February 25, 2021.
Combined with Woodside’s US$0.26 interim dividend declared in August, this takes the full-year dividend to US$0.38, down from US$0.91 in the prior year.
Managements comments
Commenting on Woodside’s ability to withstand lower oil prices, CEO Peter Coleman said: “Our disciplined balance sheet management has safeguarded Woodside’s financial resilience and positioned us to take advantage of emerging growth opportunities as markets recover”
My take
The oil price has been highly volatile throughout 2020, however, I think Woodside has weathered the storm reasonably well. Due to its low unit production costs, it has managed to generate positive operating cash flow and pay dividends to shareholders.
Looking ahead, I am probably most concerned about the ability of management to allocate capital and avoid further future write downs, such as those relating to the Corpus Christi project.
Compared to Woodside, I think there are better ASX dividend shares available.
