Q2 2021 Report
Executing a clear plan:
Should I Buy Woodside Shares? Highlights
Woodside shares were bid down massively during the Coronavirus crash after sustaining a massive blow to earnings. With the share price yet to recover and Woodside entering the exploding Green Hydrogen Sector, is now the time to buy WPL Shares?
We can see that Woodside shares were impacted by the Coronavirus crash and are yet to recover. During the start of 2020 WPL shares plummeted around 60%, down to a low of $14.93. The shares are trading sideways at around $23. WPL hasn’t seen these prices since 2005 with many investors seeing it as an opportunity to pick them up “Cheap“.
Over the last twelve months, the shares are up only 6%, compared to the broader market which has gained 22% and set all-time highs. WPL’s 52-week range is $16.80-27.60.
Woodside Petroleum is a world-class integrated upstream supplier of energy, for over 65 years. Their primary focus is LNG and Oil.
The company has been responsible for leading the development of the LNG industry in Australia.
As Australia’s leading LNG operator, they operated 6% of the global LNG supply in 2020. LNG is a lower-emissions, competitive fuel ideally suited to supporting decarbonization and improving air quality.
Their portfolio includes:
Pluto LNG: 4.9 MTPA LNG capacity
North West Hub: Woodside is the key operator of the North West Hub with 16.67% ownership.
SCARBOROUGH: 8 MTPA LNG Capacity (Coming soon)
Senegal Sangomar Field: 100,000bbl/day estimated production capacity (Coming Soon)
Aligning with the results of the previous full-year WPL realized a net loss, as such EPS was negative at -5.499. Due to this, the PE can’t be calculated. The company has a strong balance sheet giving the group net tangle assets per share of $16.29, meaning 70.98% of the shares price is backed by assets. This makes the price seem relatively attractive.
From previous reports the companies earnings have averaged $1 per share, the previous reported positive earnings were valued at $0.37 (Decemember 2019). Based on these earnings the theoretical PE would be 22.95-62x.
On the 31st of March WPL released its most recent financial results for the first quarter. Here the company highlights revenues up 22% from the previous quarter. Rough weather was to blame for reduced oil productions, but the company realized record prices for their Oil and LPG which largely offset the reduced productivity.
Preparations for Drilling Campaign mid-2021:
One thing we wanted to point out was Woodside’s entry into the Renewable Hydrogen Sector through H2TAS. This is a space that we have been looking into closely, are considering entering at the right opportunity.
Woodside’s Green Hydrogen Play
Woodside is making big moves into the renewable Hydrogen space through their H2TAS space. This is a project we are very bullish about. We talked about the potentials of renewable hydrogen in this article.
Supplying hydrogen to industrial users is now a major business around the world. Demand for hydrogen, which has grown more than threefold since 1975, continues to rise – almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production.
Green hydrogen gives Australia an opportunity to slash our emissions — and if we get this right, the impact could be nothing short of nation-building, argues business leader Andrew Forrest in the first of his ABC Boyer Lectures.
Twiggy Forest ABC Interview
Woodside is well-positioned to become a leading provider of Renewable Hydrogen not only in Australia but the world. Through their currently established infrastructure and historic export regulations, namely with Asia, Hydrogen will be a synergetic opportunity for the company. Woodside currently exports 6% of the worlds LNG.
H2TAS participants are Woodside (Operator) and Countrywide Renewable Energy (CRE).
Countrywide is a renewable energy business that develops power generation projects to decarbonize Australia, inject growth into the regional and metropolitan areas and provide sustainable emission-free energy.
Woodside is an energy company that is looking to position itself well into the low-emissions, renewable energy sector through their LNG, and Renewable Hydrogen plays.
WPL also has a lot of work in the pipeline including Scarborough, Pluto 2, and H2TAS. Scarborough once in full production is estimated to produce 8 million tonnes per annum in LNG. This will be one of their largest LNG production facilities behind the prestigious North West Hub, which produces 16.9MTPA.
One consideration for Woodside is its exposure to raw commodities.
In the coming few years Woodside has a lot of projects coming to completion. They have an excellent balance sheet and great opportunities within the Renewable Hydrogen space.
Although the shares price is backed by a large proportion of solid assets, the loss of earnings has severely impacted fundamentals. Even with the return of normal earnings, the current share price would see a PE ratio of around 23x. Given the reliance on commodity prices, we see this as slightly overvalued.
We are bullish on the future of Woodside Petroleum and Renewable Hydrogen
Full Analysis If Interested: https://prophet-invest.com/should-i-buy-woodside-shares
This is a good indication in the move up, unless there is something we do not know... However, for such large company even insider info doesn't affect the price enough. So I expect a move up, naturally!
Disclosure: Holding and adding.
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.