Woodside Petroleum (WPL) Shares Update

Submitted by Craig Strzelecki on 9 February, 2007 - 21:58

Woodside Petroleum (WPL) have a Long Term Buy 1 share trading recommendation and a price target of $43.89 from analyst UBS. The BHP Billiton 31 Dec 2006 Interim Result of 7 Feb has highlighted that North West Shelf Project area (NWS) operating costs have risen by a significant 27% in US$ and 25% in A$ over the Dec '06 half year period (yoy). Although a portion of this increase can be related to one off costs, they have cautiously revised up our Woodside (WPL) NWS operating cost assumptions. The impact on our WPL EPS forecasts is as follows: 2006E EPS -1.3%, 2007E EPS -3.3% and 2008E EPS -2.1%. The increase in their forecast NWS costs has also reduced our WPL valuation and share price target by 79 cps each. The shares analyst continue to rate WPL as one of Australia's best long term resource sector investments, largely due to its quality asset base which has potential to support an exceptional production growth profile from a diversified portfolio of mainly WPL operated oil, gas and LNG project developments. Their NAV is based on a DCF (10% nominal discount rate) of WPL fcst cash flow over the 2P reserve life of producing assets and all known committed and highly probable projects. Our share price target is A$43.89 (prior A$44.68) 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!