both woodside and chevron want more gas

Woodside buoyed by Pluto Print Matt Chambers | April 25, 2009
Article from: The Australian
OIL and gas producer Woodside has stepped up plans for a second liquefied natural gas train at its Pluto project in Western Australia after a promising offshore discovery last quarter.

Woodside yesterday said it was considering embarking on front-end engineering and design on further plants, or trains, spurred on by a discovery last quarter in the Greater Pluto region of the Carnarvon Basin.

The company is yet to declare how much gas it believes it has in the Martell-1 discovery, which was announced in February, but has previously said it is targeting up to 1 trillion cubic feet (tcf).

While this will not be enough to underpin a second train (Pluto 1 received the go-ahead with 3.5tcf) analysts say it is a substantial boost to the project's prospects.

Woodside is building the first Pluto train near Karratha in the Pilbara region.

The Perth company yesterday posted a big drop in first-quarter revenue, down 34 per cent from the previous quarter at $1.09 billion, because of sliding oil prices and lower production.

Production was down 11 per cent from the previous quarter at 20.6 million barrels of oil equivalent because of maintenance, cyclones and field decline.

Woodside neither updated nor reaffirmed full-year production guidance of 81-86 million barrels of oil equivalent.

However, it is expected to do so next week, after further assessment of its out-of-action Vincent oil operations off the northwest coast.

Production at Vincent has been halted since April 13 due to a fire in a compressor at the project's floating storage and production ship.

Woodside said an update was expected to be provided by the end of next week.

Despite the big fall in revenue, Woodside shares rose 15c to $37.80 yesterday.

"The numbers were in line with what we expected, which was pleasing," said one analyst.

Woodside said capital spending this year would be pared back to between $6.6 billion and $6.7 billion, down from a previous target of $7.3 billion.

The cut was slightly bigger than a $500 million pullback flagged in February at the company's full-year results.

At the time, Woodside said it would also explore asset sales but yesterday gave no indication how they were progressing.

"Management initiatives continue to be implemented and a more detailed breakdown will be provided with the interim profit announcement in August," Woodside said.

At the end of last month, Woodside held about $US1.64 billion in undrawn debt facilities and said a number of extra debt facilities were under consideration for this year.

Woodside said its partners in the Browse joint venture were still considering whether to build the project in the planned Kimberley LNG precinct or at Woodside's Karratha base.

Earlier this week, Woodside signed a heads of agreement with the WA Government and the Kimberley Land Council to establish a precinct near Broome.

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