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Bloomberg: Woodside 2nd-Quarter Sales Rise 14% on Higher Output (Update4)

By Angela Macdonald-Smith

July 19 (Bloomberg) — Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, said second-quarter sales rose 14 percent, buoyed by the start-up of the A$1.48 billion ($1.3 billion) Enfield oil project off the northwest coast.

Sales rose to A$969.7 million in the three months ended June 30, from A$848 million in the year-earlier period, the Perth- based company said today in a statement to the Australian Stock Exchange. Output rose 9 percent to 17 million barrels of oil equivalent.

Woodside and Mitsui & Co. last July started up the Enfield project, the Australian company’s biggest-producing field. The Woodside-operated North West Shelf venture delivered six more liquefied natural gas cargoes in the quarter than a year earlier, benefiting from rising demand in north Asia, while output at the Chinguetti oil field in Mauritania slid 62 percent.

“I thought it was a good quarter; it was pretty much in line with our numbers,” said Andrew Blakely, an oil and gas analyst at Macquarie Equities Ltd. in Sydney. “My first impressions would be, very strong LNG sales, the big positive would be Enfield, while Chinguetti is the problem child still.”

Shares in Woodside, 34 percent owned by Royal Dutch Shell Plc, rose 71 cents, or 1.6 percent, to A$46.42 on the exchange in Sydney, lagging a gain of 2.1 percent in the exchange’s benchmark energy index.

“Revenue increases occurred mainly in response to higher sales and production volumes,” Woodside said in the statement. “LNG sales volumes were also good with the North West Shelf venture delivering 53 cargoes in Q2 2007, compared to 49 in Q1.”

Quarterly Fall

Production fell in the second quarter from the first, with lower output of condensates at the North West Shelf venture and of oil from the Laminaria, Chinguetti and Gulf of Mexico fields, while Woodside sold its interest in the Legendre field in Australia.

First-half sales rose 19 percent to A$1.87 billion, on production that increased 17 percent to 35 million barrels of oil equivalent. That means Woodside needs to increase production by at least 5.7 percent in the second half over the first to meet the bottom end of its full-year target of 72-78 million barrels.

Second-half production will be supplemented by the start-up of the delayed Otway gas project off southeastern Australia, now due by the end of August, Woodside said. The BHP Billiton Ltd.- operated Neptune oil project in the U.S. and the Stybarrow oil project in Australia, also operated by Melbourne-based BHP, may start up late in the fourth quarter, it said.

Oil Slips

The average price Woodside got for oil produced in Australia fell in the first half compared with a year earlier, said Roger Martin, a spokesman. Woodside got A$81.21 a barrel on average in the first half of 2007, 9.6 percent down from A$89.79 a barrel in the same half a year ago.

The proposed Pluto LNG project, set to cost between A$6 billion and A$10 billion, is due for a final investment decision by the board within two months, Woodside said. The North West Shelf venture’s expansion to add a fifth LNG production unit is on schedule to start deliveries by the fourth quarter next year.

Woodside’s capital expenditure jumped 25 percent in the second quarter from a year earlier to A$703.1 million. Spending on exploration and field evaluation rose 23 percent to A$134.5 million. The company said it drilled three non-commercial or dry exploration wells in Libya in the quarter, including two offshore wells, and one non-commercial exploration well in the U.S. Four exploration wells drilled in Australia have yet to be completed.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected] .

 

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