Woodside Petroleum (WPL) is Australia's largest oil and gas explorer and producer. WPL operates the $27 billion North West Shelf (NWS) Venture in offshore WA, which produces around 40% of Australia's oil and gas.

The company also has several key LNG projects, which include, Pluto (WA), Browse (WA) and Sunrise (East Timor). The Pluto project is up and running, but the Browse basis LNG project has been delayed for a period of the two years.

Key Points

Quarterly Report:

WPL reported strong production of 21.9 mmboe for the 3Q13, which was up 9.5% quarter on quarter, the result was mainly due to increased production from the North West Shelf following planned maintenance shutdowns in 2Q13

Sales volumes of 20.9 mmboe up 33.5% on 2Q13

Revenue came in flat at US$1.34 billion, with the higher sales offset by slightly lower realised average prices

Leviathan and Browse

Outlook

WPL's quarterly results were solid with lower pricing offset by higher production.

Interestingly a majority of its sales were done via previous contracts; we expect repricing of these contracts in the coming quarters which should lead to a higher average price.

We expect WPL would want a deal to be finalised in the next few months for the Leviathan Gas fields as it is expected to begin drilling in 1QCY14. In our view a Leviathan deal coupled with a clearer outlook on the Browse project will continue to lead to share price appreciation.

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