Australian energy giant Woodside on Wednesday posted a 49% increase in profit for the first half of the year, owing to higher oil prices and lower production costs.
According to its half-year 2017 report, Woodside recorded a net profit after tax of $507 million for the first half of the year, compared to $340 million in the prior-year period.
During the period, the company focused on sustained cost reductions, reduced seismic activity and increased appraisal drilling and reduction in depreciation driven by increased Pluto developed reserves and Greater Enfield reserves booking.
The company’s sales revenue was $1.76 billion, an increase of $139 million due to higher prices. During the period, production was 42.2 MMboe and average realized price increased by 10% to $43/boe.
Sales volume was lower, impacting revenue by $136 million. Woodside said that lower sales volume was largely due to lower LNG production, lower NWS pipeline gas volumes impacted by a change in venture equity, and oil operations discontinued in 2016.
Production from continuing oil operations increased due to strong operational performance across the floating production storage and offloading (FPSO) fleet and the timing of the Okha FPSO dry dock in 2016.
Production costs decreased by $33 million. The reduction was impacted by operations discontinued in 2016 and lower shutdown activity. Sustained structural cost reductions continue to underpin low unit production costs. Compared to 1H 2014, total production costs down were down $149 million.
Capital expenditure in 1H 2017 was $651 million, down from 1H 2016 expenditure of $754 million. Approximately 70% of this was invested in currently sanctioned projects, including Wheatstone LNG, the Greater Enfield Project and the NWS subsea tieback projects, which are expected to contribute to production growth of approximately 15% from 2017 to 2020.
Offshore Energy Today Staff