Woodside achieved record LNG production numbers in 2016. Photo courtesy of Woodside.
Woodside is forecasting an increase in LNG contract prices for Quarter 1, 2017 on the back of improving oil prices and a lag in oil-linked pricing formulas for existing LNG contracts.
Reporting its December 2016 quarterly results, Woodside revealed that it had already benefitted from improved pricing for its LNG products in the second half of 2016 with the NWS LNG pricing up by 17%, while the Pluto LNG realised price increased by 4%.
The company also reported that it had set a new record for annual LNG production at 63.7 MMboe, more than 9% higher than the previous record set in 2014.
At the same time it achieved its second highest ever annual production result with 94.9 MMboe, 3% higher than 2015.
Strengthening oil prices saw Woodside’s sales revenue for the quarter jump on the previous quarter to $1,079.3.
Woodside CEO Peter Coleman said the fourth quarter results highlighted an excellent performance by the company.
“Woodside starts 2017 in a strong position. Our business margins have improved through 2016 and our 2017 budget is free cash flow neutral at US$35 per barrel.
“Production performance has been outstanding, with the team consistently delivering world-class operational performance. LNG production system reliability has now exceeded ninety-nine per cent for a second consecutive quarter.
“The Wheatstone project is approaching LNG Train 1 construction completion, all modules are on-site and final hook-up and commissioning has commenced. We look forward to adding production fromWheatstone in the middle of this year. Wheatstone is a key component of our near-term growth strategy and will contribute more than 13 MMboe of annual production once both trains are fully operational.
“We are about to start significant appraisal work in Senegal and Myanmar complemented by exploration in Australia, Senegal and Myanmar. In parallel, the Greater Enfield project is progressing to plan, including the manufacture of subsea equipment,” he said.
On the Project front, Woodside reported:
•First LNG from Train 1 is expected in mid-2017 and from Train 2 six to eight months later.
•The project remains on budget and schedule for start-up in Q3 2017.
•At the end of the quarter, progress was 89.8% complete versus 84.2% planned.
•The project completed the reservoir drilling and completions campaign and commenced subsea installation.
Greater Western Flank 2 (GWF-2)
•The project remains on budget and schedule.
•At the end of the quarter, progress was 33.4% complete versus 22.3% planned.
•The offshore campaign commenced with the installation of mooring piles at two drill centre locations. The reservoir drilling program has commenced.
•The project remains on budget and schedule for first oil in mid-2019.
•At the end of the quarter, progress was 8.6% complete versus 6.4% planned.
•The manufacture of subsea equipment has commenced.