WDS - Woodside Energy Group

[gfresh]

Looking at starting to pick up some of this for the bottom draw.

A little surprised it has not come down further to be honest?

Looking at their majority oil side, we've had oil come down from $US140 to now ~$US36. Our dollar has come down from avg 90c to what may average around 65c. Assuming some sort of average of $US110bbl down to $US40bbl for 09, that's $AUD122bbl (90) to $AUS62bbl (65), or nearly 50% reduction per barrel.

EPS forecast is 329.5cps for 08. According to WPL, production in 09 should be steady compared to 08. So if the profit per bbl is halved, 09 net profit could be considered down at least 30-40%

Currently trading at $32.90, on 08 P/E that's 10, but for 2009 can see no pricing of some 30-40% reduction in net profit, which should price it at around $27, and that is generous..

At the moment seems to only be priced in a mere 20% fall in eps (at forward 12 p/e)

I assume Woodside would have not had full exposure to each of these movements due to longer-term contracts, but either seems like market has priced in a strong reduction in $AUD, and/or a higher oil price than $US40bbl in 2009 ?

 

[Sean K]

Anyone holding or watching?

Wonder if anyone more cashed up than us would like to bolt them on at these levels? Has been discussed quite a bit the past few years that they wouldn't stay independant for much longer, but they still are....

I assume when the downturn turns and people start driving their V12s SUVs in the USA, and the Chinese all replace the bike with a car that POO will recover, and so will WPL.

I've got no idea how significant the recent gas descovry is.

ASX Announcement
Wednesday, 25 February 2009
MARTELL GAS DISCOVERY UPDATE
On 24 February 2009 Woodside reported a gas discovery in the Martell-1 exploration well in permit WA-404-P in Western Australia’s Carnarvon Basin.
Pressure testing of sandstones over an interval of 2778 metres to 3201 metres (MDRT*) has confirmed a gross gas column of about 110 metres and the presence of a gas-water contact.
The Martell-1 well is about 290 km from Karratha and 100 km north-west of the Pluto field. Water depth at the location is 1290 metres.
The Martell-1 discovery is expected to be followed by further drilling on the structural trend later in 2009.
Woodside Energy Ltd is Operator of WA-404-P and has a 50% equity interest. Hess Exploration (Carnarvon) Pty Ltd has the remaining 50% equity.

What's a 110m column sound like? Any clues?

At the moment doesn't seem to be going anywhere. I thought it may have been on the way up after getting through $36 but promptly fell. Now a little support at $32 with $36 again the resistance. I'm looking to see which one gives for direction.

 

[grace]

I am still holding Kennas from 2 years ago. My buy price was $33 and the POO was about $50 then as I recall. I guess I haven't lost any money on them, and have picked up some divs. I call any buy into the good oil/gas stocks a good move. Oil won't stay this low forever.

 

[shag]

yes the POO seems to have found a bottom. opec have made large cuts and even they must be able to get their sh-t togeather to get 60-80 bucks a barrel in this climate, rather than floating it away for sub 50.
they know they won't have it forever and have seen what peak oil does, ie the quick escalation to 150 a barrel.
gas is so clean and usable too. cng cars don't stink like todays petrol ones.
with todays technology its easily transportable also.
the world has far too much coal for its own good, unless we can get some form of carbon capture. bloody china has massive amounts of cr-p coal it will likely try to burn increasingly.

 

[prana]

I'm a holder - good company, solid assets and long oil (drop in exploration) supply side fundamentals, I picked up more. Contango agrees

 

[gfresh]

Results out today.. revenue down -14% on last quarter and same qtr last year (-36%).

Q2 Production Revenue down: $938M vs $1090 Q2 08
YTD Revenue 2009 $2028.1 vs $2574.3 2008

Production is fairly steady

So higher $AUD seems to be having a hit on their results (as per Santos), as to be expected I guess. Still waiting on the LNG to really up the $ numbers, still over a year away.

 

[Sean K]

Potential breakout through $45?

Operating at a pretty big PE which has always been the case. Maybe due to the growth potential, quality of assets and takeover spec factored in. The logical tie up with BHP lingers. Just a question whether BHP wants more O&G exposure I suppose.

 

[shag]

could bhp afford wpl and rio combined?
i thought rio alone was a stretch...
all three would really be the big australian.

 

[dan-o]

Does anyone who follows WPL closely think they are likely to raise equity?? ive been watching this one for a while but would like to know peoples thoughts...

 

[jancha]

Interesting interview with Don Voelte Chief Executive Officer of WPL on the subject of CSG. He stated that the company would never get into the CSG. Lots of negatives & that the smart buyers have sold out of it now that the hype has worn down & now the cost factor comes into it. He doesn't think it will even take off. Article in the Eureka Report 7th of Sept. Any thoughts on his comments?

 

[TheAbyss]

Interesting interview with Don Voelte Chief Executive Officer of WPL on the subject of CSG. He stated that the company would never get into the CSG. Lots of negatives & that the smart buyers have sold out of it now that the hype has worn down & now the cost factor comes into it. He doesn't think it will even take off. Article in the Eureka Report 7th of Sept. Any thoughts on his comments?

Is that like the oil companies saying electric cars will never be mass produced or any other producer/ manufacturer saying the competition isn't really competition to them?

CSG in Qld alone is equal to the oil energy reserves in WA so why wouldn't he maintain his defensive position? Its what he has to do as both share similar marketplaces.

The billions of dollars invested and planned expenditure to date belie the great Don's words of wisdom re CSG is dying. Yes it costs more to produce however that is offset by the large quantities available.

There is room for more than one energy source. Ask the power stations lining up to book their CSG driven gas supplies to power their generators. Then consider the Asian conglomerates who are lining up to secure CSG produced LNG for their shores.

I own WPL for the Oil and LNG interests however i also have quite a few CSG plays and have ridden that wave for quite a few years now. CSG is a real threat to thermal coal not WPl so not sure why Don has been so vocal for so long about CSG not getting off the ground. Having said that, there are far too many existing Thermal coal driven power stations etc to say CSG will replace that medium however there are now more power stations being built to take gas so there is a future for CSG make no mistake.

To say it will not ever take off is ludicrous as there are a raft of multi-nationals already on board and driving htis industry. Yes things have slowed down for some consolidation however that doesn't mean there isnt a whole lot more to this ride. Actual sales and production are the tip of the ice berg so far. This will be a great story for decades or the next great energy source. Yes we will need oil for a very long time however LNG is the next wave not a play toy of the rich, it is a viable and marketable product so CSG is here to stay the only question is how big a part will it play?

 

[cctrouble]

Is that like the oil companies saying electric cars will never be mass produced or any other producer/ manufacturer saying the competition isn't really competition to them?

CSG in Qld alone is equal to the oil energy reserves in WA so why wouldn't he maintain his defensive position? Its what he has to do as both share similar marketplaces.

The billions of dollars invested and planned expenditure to date belie the great Don's words of wisdom re CSG is dying. Yes it costs more to produce however that is offset by the large quantities available.

There is room for more than one energy source. Ask the power stations lining up to book their CSG driven gas supplies to power their generators. Then consider the Asian conglomerates who are lining up to secure CSG produced LNG for their shores.

I own WPL for the Oil and LNG interests however i also have quite a few CSG plays and have ridden that wave for quite a few years now. CSG is a real threat to thermal coal not WPl so not sure why Don has been so vocal for so long about CSG not getting off the ground. Having said that, there are far too many existing Thermal coal driven power stations etc to say CSG will replace that medium however there are now more power stations being built to take gas so there is a future for CSG make no mistake.

To say it will not ever take off is ludicrous as there are a raft of multi-nationals already on board and driving htis industry. Yes things have slowed down for some consolidation however that doesn't mean there isnt a whole lot more to this ride. Actual sales and production are the tip of the ice berg so far. This will be a great story for decades or the next great energy source. Yes we will need oil for a very long time however LNG is the next wave not a play toy of the rich, it is a viable and marketable product so CSG is here to stay the only question is how big a part will it play?

The third world will never take to electric cars so there's still a good market for petroleum companies.

 

[gfresh]

The third world will never take to electric cars so there's still a good market for petroleum companies.

Wish to rethink? http://www.nytimes.com/2009/04/02/business/global/02electric.html

 

[TheAbyss]

The third world will never take to electric cars so there's still a good market for petroleum companies.

I have no doubt about that. My point is that there is room for Oil and LNG. If you believe that then you have to believe the CSG story because CSG will produce enough LNG to sustain a contribution to our energy guzzling planet for quite a while and at a healthy profit.

No it wont replace oil but it will certainly cement itself as a viable energy source which old mate Don at WPL is casting some doubt but as i have said previously, that is his responsibility as a Oil and Gas leader. WPL is a great company no doubt.

 

[enigmatic]

Announcement out today
Woodside Announces A$2.5 Billion Equity Raising
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01022048

Looks like they are doing a 1 for 12 accelerated renounceable entitlement at $42.1 a share i was interested does anyone know if there is a min share purchase.

I was also looking through the presentation and it looks promising with the ramp up of production of LNG by WPL going from about 3mtpa -> 20mtpa within the next 10years.

 

[skyQuake]

Announcement out today
Woodside Announces A$2.5 Billion Equity Raising
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01022048

Looks like they are doing a 1 for 12 accelerated renounceable entitlement at $42.1 a share i was interested does anyone know if there is a min share purchase.

I was also looking through the presentation and it looks promising with the ramp up of production of LNG by WPL going from about 3mtpa -> 20mtpa within the next 10years.

Its pro-rata so probably no min share purchase (1 share maybe).
A bit of selling on the other oilers possibly to fund WPL entitlements.

 

[Knobby22]

Announcement out today
Woodside Announces A$2.5 Billion Equity Raising
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01022048

Looks like they are doing a 1 for 12 accelerated renounceable entitlement at $42.1 a share i was interested does anyone know if there is a min share purchase.

I was also looking through the presentation and it looks promising with the ramp up of production of LNG by WPL going from about 3mtpa -> 20mtpa within the next 10years.

That explains the recent weakness in price. I couldn't work it out.

It would be foolish to not take up the offer imao. (the a stands for arrogant, I don't really seee how it can be humble.).

 

[eddyeagle]

I'm thinking of adding WPL to my portfolio as a long term investment as i'm bullish on the long term oil price and I like the LNG prospects, but I think it's important to get the entry point timing right.

It's in a trading halt til the 17th with this capital raising and the SP is currently $47.18. Do people think the share price will take a bit of hit when it comes back online?

 

[oldblue]

The shares are already ex issue so when they resume trading tomorrow I would expect a bit of weakness from the previous close. Not a lot I wouldn't think and nowhere near the issue price of $42.10 but maybe somewhere around $44-$46.

At these levels it would be attractive to me and I could be a buyer.

 

[vincent191]

Oldblue....I agree with you. Since it is only a 1 for 12 issue and at only a 10% discount, THERE IS NO WAY it will open at $42!!! I reckon maybe $46 and maybe even go up!!!!