Is the Woodside Petroleum Limited (ASX: WPL) share price worth buying after the release of its June 2019 quarter report.
Woodside Petroleum is Australia’s largest independent oil and gas company with a global portfolio. It is an explorer, developer, producer and supplier of energy. The company has been operating for over 60 years and is now Australia’s leading LNG producer. Some of its current development projects are in Senegal (SNE), Myanmar, Canada (Kitimat) and Timor-Leste / Australia (Sunrise).
Woodside’s June 2019 Quarter Report
The oil business reported that it produced 17.3 MMboe (Million Barrels of Oil Equivalent) for the quarter to 30 June 2019.
Woodside also reported that it delivered sales revenue of $738 million for the quarter.
The Greater Enfield project remains on schedule and on budget and at 30 June 2019 was 95% complete with all subsea infrastructure installed and 10 of the 12 development wells now complete.
Woodside also said that the Pluto water handling project is on budget and schedule and was 48% complete.
The Browse Joint Venture approved the basis of design for the Browse to NWS Project in May 2019.
Talking about Greater Enfield and Browse, Woodside CEO Peter Coleman said: “These two projects underpin our growth strategy to unlock the future value of the North West Shelf and Pluto LNG facilities, as part of our vision for the Burrup Hub.”
The company also showed its half year guidance. Production costs are expected to come in at $260 million to $300 million. Depreciation for its oil & gas properties is expected to be $680 million to $720 million, and lease asset depreciation is expected to be between $20 million and $60 million. Net finance costs will be $90 million to $130 million and royalties & excise will be $95 million to $135 million.
Is Woodside A Buy?
It seems that, although production and sales revenue were lower than the previous quarter, that may be soon about to turnaround with Pluto coming back up to speed and Greater Enfield soon coming on-line.
As long as the oil price holds up then Woodside may have a solid second half of 2019. However, I don’t like the idea of holding resource businesses because of how cyclical they can be, even if Woodside has a big dividend.
I prefer holding consistently reliable businesses like the ones in the free report below.
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