Woodside Petroleum (WPL) Share Trading Recommendation

Woodside Petroleum (WPL) has been lowered share trading recommendation of Hold (2M) (from Buy 1M) with a decreased share price target of $41.80 (from $42.70) from Citigroup Investment Research (CIR). With Woodside already clearing the Pluto site, the project risks should be falling not rising. The start-up of a GTL plant by Chevron / Sasol could tie up some 3rd party gas options, thus increasing the pressure on exploration to find the "missing" gas volumes. Gas reserves delineated to date appear sufficient to support a 6Mt/yr LNG project for 15 years but not a 20-year operation. To achieve standalone status further exploration success or the tolling of 3rd party gas would be required. There is some exploration potential within the Pluto block. There is more likelihood in adjacent blocks; however equity in those gas molecules if delineated would be diluted from 100% at Pluto to 50%. Two wells are planned in Block WA-370-P in 2007. This rise in project risk, unless ameliorated, could increase funding costs and squeeze project returns. CIR have reduced the probability that the project will proceed from 75% to 60% and in so doing have lowered their target price from $42.70 to $41.80 per share.

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!