The Woodside Petroleum Limited (ASX: WPL) share price is on watch today after revealing its 2021 second quarter report.
Woodside Q2 2021
The oil and gas giant announced that it achieved sales revenue of $1.285 billion, which was up 15% from the first quarter of 2021.
It delivered production of 22.7 million barrels of oil equivalent, down 4% from the first quarter of 2021.
Woodside also said that it delivered sales volume of 28.1 million barrels of oil equivalent. That was an increase of 9% from the first quarter of 2021.
Recent operational highlights
Woodside said it had launched sell-down processes for Scarborough and the Pluto Train 2, timed to align with the targeted final investment decision (FID) in the second half of 2021.
It has commenced the drilling campaign for the Sangomar Field Development Phase 1 in July 2021.
Woodside also completed the acquisition of FAR’s interest in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture in July 2021 and launched a sell-down process.
The resources company has executed three sale and purchase agreements (SPA) for the supply of domestic LNG from the Pluto LNG truck loading facility.
It has also signed a heads of agreement (HOA) with IHI Corporation and Marubeni Corporation to investigate the production and export of green ammonia from renewable hydroelectric power in Tasmania.
Management comments
Woodside Acting CEO Meg O’Neil said that higher prices in the second quarter helped the growth in revenue:
“Revenue from oil sales during the period was higher than the first quarter supported by an above-market average realised price of $75/barrel while revenue from LNG sales climbed 14%.
“Lower oil production due to scheduled maintenance activities and adverse weather impacts was partly offset by a strong quarterly performance at Pluto, which achieved 97% reliability.”
Summary thoughts on Woodside and the share price
Woodside is a leading resources business that has scale benefits and a good market position. However, not only is it a price taker – where it has little control over the price of its product – but that product (oil) is expected to see declining demand in the decades ahead.
However, expanding into green ammonia and other green resources could be a good long-term move to ensure the company’s ongoing success.
But I’m not a buyer of Woodside after its recovery from the lows of COVID-19. Though the dividend yield isn’t bad.
