Hi @Remorhaz I watched the ABC report also. I think the so called ‘gas crisis’ is the result of the perfect storm of events that have driven gas demand, and consequently sky high gas prices. Here are some of the contributors to the perfect storm:
I think the perfect storm will pass in months, not years. When it passes, I think the long-term low carbon emission theme will return to haunt Woodside and other fossil fuel producers.
While the shortage of fossil fuels has some time to run, I’ve taken this as an opportunity to offload Woodside IRL at 12 month highs. I think back to March 2020…nobody wanted Woodside for just over $15.
Fossil fuels, carbon credits and transitioning to clean energy ABC 7:30 Carbon Dilemma
A recent short (seven and a half minutes long) ABC 7:30 piece on Woodside's Scarborough Gas Project. It questions whether natural gas is truly key in the green transition and whether Woodside's latest proposal will blow past the global carbon budget
Disc: Held in RL
Seems to me that Woodside now has unknown liabilities related to decommissioning in the Gulf of Mexico; any one of which could blow up the balance sheet. The risk profile is not justified by the share price .. I am out, with my nose just above water
SCARBOROUGH PROJECT UPDATE AND LINE ITEM GUIDANCE
Scarborough project update
In the lead up to the targeted final investment decision (FID) later this year, Woodside has finalised technical work to support execution readiness and completed an update of the capital expenditure requirements for the Scarborough development.
Refreshed pricing from major contractors underpins the updated cost estimate, and reflects Woodside’s work with them since 2020 to maximise the value of the project by optimising design and execution planning, and increasing offshore processing capacity.
The updated cost estimate is US$12.0 billion (100% project, nominal), comprising $5.7 billion for the offshore component and $6.3 billion for the onshore component.
The cost estimate is approximately 5% higher than the previous cost estimate announced in November 2019 and incorporates:
The expected internal rate of return (IRR) of the integrated Scarborough and Pluto Train 2 development is greater than 12%. It has a globally competitive cost of supply of approximately $6.8/MMBtu to north Asia and is targeted to deliver the first cargo in 2026 into a market with anticipated robust demand for LNG.1
Woodside Acting CEO Meg O’Neill reaffirmed that the Scarborough development is a transformational project that will deliver enduring shareholder value.
“Significant progress has been made towards our targeted final investment decision on Scarborough and Pluto Train 2 this year. “The cost update includes value-accretive scope changes to deliver an approximately 20% increase in offshore processing capacity and to modify Pluto Train 1 to allow increased Scarborough gas processing. It also reflects the work undertaken with our contractors to optimise the execution schedule and manage costs in preparation for FID.
“Woodside’s contracting strategy for Scarborough reduces cost risk, with approximately 90% of total project contractor spend structured as lump-sum and fixed rate agreements.
“We have commenced the formal processes for selling down our interest in Pluto Train 2 and Scarborough as we target the investment decision later this year and these processes are supported by the updated cost estimate,” she said.
Half-year 2021 line item guidance
Woodside reiterates the half-year 2021 line item guidance provided in the second quarter 2021 report on 15 July 2021 for
“Other expenses – other” of $135 – 165 million. “Other expenses – other” comprises Kitimat expenditure (including exit costs), gains and losses on hedging activities, contractual cancellation costs and other expenses not associated with the ongoing operations of the business.
“Other expenses – other” does not include line items within costs of production, other costs of sales or general and administrative costs.
Q2 2021 Report
Executing a clear plan:
FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020
• Delivered production of 24.9 MMboe, down 2% from Q3 2020, contributing to record annual production of 100.3 MMboe.
• Delivered sales revenue of $920 million, up 32% from Q3 2020.
• Delivered sales volume of 29.1 MMboe, up 9% from Q3 2020.
• Installed the Pluto water handling module on the Pluto offshore platform.
WOODSIDE EXPANDS LONG-TERM LNG SUPPLY AGREEMENT
Woodside Energy Trading Singapore Pte Ltd (Woodside) and Uniper Global Commodities SE (Uniper) have agreed to amend the binding long-term sale and purchase agreement (SPA) announced in December 2019 to increase the supply of LNG from Woodside’s global portfolio to Uniper.
The quantity of Woodside LNG to be supplied under the amended SPA has doubled. Initial supply commencing in 2021 is now for a volume of up to 1 million tonnes per annum (Mtpa), increasing to approximately 2 Mtpa from 2026.
The majority of LNG supply from 2025 is conditional upon a final investment decision on the development of the Scarborough gas resource offshore Western Australia. The 13-year term of the SPA is unchanged.
[I hold WPL shares.]
That link will take you to a full transcript of the Teleconference that Woodside held yesterday after announcing their half year results. I posted a straw here yesterday with links to their results announcements.
[I hold WPL shares]
16-7-2020: 4:18pm: Q2 2020 Briefing Transcript and Additional Information
Also: 15-7-2020: 8:30am: Second Quarter 2020 Report
[I hold WPL shares] Gas company, largest market cap Energy play on the ASX, but entirely leveraged to Natural Gas rather than oil. Not ex-growth yet. They can move at glacial pace, but they get things done - in their own time. Very measured. Great management. Good focus on shareholder returns. Gas Production revenue underpinned by multi-year long-term contracts (recurring revenue). Pays reasonable dividends. Not as leveraged as a Santos or an Oilsearch, so less bang-for-your-buck on an oil price recovery (which drags gas producing companies up with it), but less downside risk, and still plenty of upside from here when energy companies are back in vogue once more. Good company to buy when their SP is low, which it still is.