The Woodside Petroleum Limited (ASX: WPL) share price is under the spotlight today after delivering its September 2021 quarterly update.
Woodside FY21 September quarter
In the third quarter of FY21, Woodside achieved sales revenue of US$1.53 billion. That was an increase of 19% compared to the second quarter of 2021.
The business saw an average realised price increase to $59 per barrel of oil equivalent, up 28% from the second quarter of 2021.
Woodside said that global oil and gas prices have continued their upward trajectory, underlining the rebound in demand as economic activity has picked up in Asia and elsewhere. Also, short-term gas hub prices in Europe and Asia have experienced “unprecedented and sustained increases in both value and volatility” with pricing in both markets recently reaching all-time highs.
The business delivered production of 22.2 million barrels of oil equivalent (MMboe).
During the quarter, the business enacted significant scheduled maintenance activities including at the North West Shelf Project and Pluto LNG.
Expectations for the fourth quarter of FY21
Woodside said that it’s expecting to see the benefit of stronger pricing on its ‘realised’ oil price, reflecting the oil price lag in many of its contracts and recent increases in gas hub prices. Its annual guidance remains unchanged at 90 MMboe to 93 MMboe.
Expectations can be important for the Woodside share price.
Merger
Woodside said that the agreement to pursue a merger of Woodside and the BHP Group Ltd (ASX: BHP) petroleum business is progressing as planned.
Executing the share sale agreement, and an integration and transition service agreement is expected in November, in advance of targeted completion in the second quarter of 2022 after all approvals.
Projects and initiatives
Managemenet said that the company is on track for its targeted final investment decision (FID) on the Scarborough and Pluto Train 2 developments before the end of the year.
It said that the proposed Scarborough and Pluto Train 2 equity sell-downs are “progressing well”.
The oil giant also said that significant progress was made at its Sangomar Field Development Phase 1 offshore Senegal, with the project’s first development well drilled and completed. It has begun discussions with interested parties for the sale of some of its equity, down to around 40% to 50%.
Greener focus
Woodside CEO Meg O’Neill said:
“We have secured emerging opportunities as part of our strategy to create a significant business in new, lower-carbon sources of energy. These include signing of an agreement to undertake a joint feasibility study into the development of an ammonia supply chain from Australia to Japan and a commitment to invest in HyStation, a company which aims to accelerate the conversion of bus fleets in South Korea from diesel to hydrogen.”
Thoughts on Woodside and the share price
Woodside is certainly doing what it can to grow shareholder value. It’s up to each investor to think how much growth that a predominately oil and gas business can make. It has risen a lot since the bottom of the COVID crash, so I’m not sure if it’s good value today or not.
For me, there are plenty of exciting ASX dividend shares to consider, that aren’t in the oil space.
