Woodside Petroleum (WPL) Share Update

Submitted by Craig Strzelecki on 19 January, 2007 - 11:31

Woodside Petroleum (WPL) has a Buy 1 Share Recommendation and a share price target of $44.43 from UBS' share update. The company has released their December quarter sales revenue figures of A$1097.8m - of which UBS found that it was 4% below the Sep '06 quarter, but 9% above our forecast. UBS consider this a solid result in light of the 16% drop in WPL's realised oil price to A$74.77/bbl over the qtr. Sales volume of 19.98 mmboe was 1.28 mmboe above their forecast. Production volume of 18.97 mmboe was in line. UBS has reduced their EPS forecasts: '06 1.0%, '07E 6.9% and '08E 2.0%. Key reasons they have brought our forecasts back: Exploration exp ('06) increased, Cossack-Pioneer prod reduced over 1Q07, Otway Gas delayed by two months, Neptune start now early 1Q08 (prior 4Q07). As a result, our WPL EPS forecasts have reduced by '06 1.0%, '07E 6.9% and '08E 2.0%. However, the analyst still finds Woodside as one of Australia's best long term resource sector investments, largely due to its high quality asset base which has potential to support an exceptional production growth profile from a diversified portfolio of mainly Woodside operated oil, gas and LNG project developments. Their NAV is based on a DCF (10% nominal discount rate) of WPL forecast cash flow over the 2P reserve life of producing assets and all known committed and highly probable projects. Their share price target is A$44.43 (prior A$44.64) and is based on our NAV, significant contingent resources and potential exploration upside.

Woodside Petroleum Limited is listed on the Australian Stock Exchange (ASX) under stock code WPL. You can view their investor website here. WPL was listed on the ASX on 18 November, 1971. Don Voelte is the CEO of Woodside (WPL). The principal activity of WPL is the Management and operation of hydrocarbon exploration, development, production, transportation and marketing; implementation and operation of the North West Shelf Gas Project; exploration and development of gas, oil and condensate reserves. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. Check your charts and good luck with your share trading!