Why Woodside Petroleum Ltd’s Share Price Has Been Rising Over the Last Six Months

Woodside Petroleum Ltd’s share price has seen a positive six months after strong production and sales revenue.

Shares of Woodside Petroleum Ltd [ASX:WPL] were trading at 28.73 Tuesday, 27 February this year, but this peaked at 37.48 on Monday, 20 August. In as little as six months — they’ve experienced an increase of 30.45%.

Today woodies shares are currently trading at $35.81.

First half results good for rising Woodside Petroleum Ltd share price

Woodside reported an outlined key business activities, which showed encouraging results for the company.

The company reporting a half-year net profit after tax (NPAT) of $541 million, as well as a 25% increase to operating cash flow of $1,540 million compared to H1 2017.

Woodside CEO Peter Coleman commented on these results, saying:

First half NPAT was impacted by the timing of finance costs and exploration expense, and taxes… During the first half we delivered positive free cash flow while acquiring equity Scarborough gas resource and investing to deliver the near-term growth which will continue to target production of approximately 100 MMboe in 2020. ’

Coleman also commented on Woodside’s interim dividend of 72 cents or 53 US cents per share, saying it reflects the strong cash flow of the half.

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Woodside delivered a 44.3 MMboe production, which was 5% higher than the first half of 2017 results that saw an increased 2018 guidance.

The company also exceeded 99% reliability at Pluto LNG, increasing capacity by 14% to 4.9 Mtpa. Woodside has completed the acquisition of a 50% interest in Scarborough, and has also taken up operatorship of the company. While also processioning their Greater Western Flank Phase 2 and Greater Enfield projects, and anticipates start-ups mid-2019.

Woodside Petroleum has clear plans across its three Horizons

Woodies’ strategy to deliver growth across all three development Horizons are stated below:

The first being from 2017–2021 involving cash generation. It aims at  lower capital intensity developments, new growth platforms through exploration and acquisitions, new revenue streams expanding the LNG market and preparing Horizon II;

Spanning 2022–2026 concerned worth value potential. Aims at development leveraging existing infrastructure, monetise exploration and acquisition success, increased supply to new and traditional markets, as well as Growth Funded by base Business and Horizon I growth.

Lastly, Horizon III 2027 onward looks at success repeated, to do with capital efficient developments and unlocking new major hubs.

Peter Coleman left investors with this:

‘We are executing our strategy, preparing to enter a growth and construction phase for our significant Western Australian gas developments and progressing our international opportunities.’



Ryan Clarkson-Ledward,
For Money Morning


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Ryan Clarkson-Ledward is an Editor at Money Morning.

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