Wood­side inks $1.1b syndi­cated five-year loan as LNG costs climb

The Pak Banker - - Company& -

OT­TAWA: Wood­side Petroleum Ltd., Aus­tralia's sec­ond-largest oil pro­ducer, agreed to a $1.1 bil­lion fiveyear syndi­cated loan to re­fi­nance ex­ist­ing debt.

Aus­tralia and New Zealand Bank­ing Group Ltd. and Bank of Tokyo-Mit­subishi UFJ Ltd. ar­ranged the loan, which was pro­vided by 34 banks, Perth-based Wood­side said in a stock ex­change fil­ing. It will use the funds to re­pay a loan of the same size signed in May 2009, ac­cord­ing to the fil­ing.

Wood­side said Nov. 30 that its Pluto liq­ue­fied nat­u­ral gas ven­ture, one of more than a dozen pro­posed LNG de­vel­op­ments in Aus­tralia and Pa­pua New Guinea, will cost A$900 mil­lion ($881 mil­lion) more and start about six months later than pre­vi­ously pro­jected. The com­pany's credit rat­ing was cut to BBB+ from A-by Stan­dard & Poor's on Dec. 3.

Wood­side re­duced its fi­nanc­ing costs with the new loan, it said to­day, with­out be­ing more spe­cific.

The oil pro­ducer was pay­ing 225 ba­sis points more than the London in­ter­bank of­fered rate on the loan signed in May last year, while it was rated A, ac­cord­ing to data com­piled by Bloomberg. The mar­gin in­creased to 250 ba­sis points for a BBB+ rat­ing, the data show.

Wood­side shares rose 0.9 per­cent to A$43.11 as of 10:10 a.m. in Syd­ney, par­ing their de­cline this year to 8.8 per­cent. The S&P/ASX 200 In­dex has fallen 3.3 per­cent in 2010.

More­over, Oil may halt its ad­vance past a 26-month peak above $90 a bar­rel be­cause of re­sis­tance on tech­ni­cal charts in­di­cated by Bollinger Bands, ac­cord­ing to Cameron Hanover Inc.

Crude climbed to $90.76 a bar­rel on Dec. 7, the high­est in­tra­day price since Oc­to­ber 2008. While fu­tures may again sur­pass the "psy­cho­log­i­cally im­por­tant" $90 level, in­vestors will prob­a­bly start sell­ing con­tracts when prices ad­vance to around $90.55, said Peter Beu­tel, pres­i­dent of the en­ergy ad­viser in New Canaan, Con­necti­cut. That is the higher of two Bollinger Bands.

"The Bollinger Bands con­tinue to of­fer re­sis­tance over­head," Beu­tel said in an emailed note. "There is room for a good deal more weak­ness than we saw on Wed­nes­day."

Oil re­bounded from a two­day drop to­day af­ter an En­ergy Depart­ment re­port showed U.S. crude stock­piles fell al­most three times more than fore­cast, as re­fin­ers boosted pro­cess­ing rates by the most since Oc­to­ber 2008. The con­tract for Jan­uary de­liv­ery on the New York Mer­can­tile Ex­change rose as much as 1 per­cent in elec­tronic trad­ing to $89.20 a bar­rel.

Bollinger Bands, which plot sup­port and re­sis­tance lev­els based on volatil­ity, are of­ten used by in­vestors to de­ter­mine en­try points for buy­ing or sell­ing con­tracts. Crude fell in early Au­gust, early Oc­to­ber and midNovem­ber af­ter ris­ing above the up­per band and re­bounded in late May and Au­gust af­ter slip­ping be­low the lower band.

The mar­ket's fail­ure to ex­tend gains af­ter top­ping $90 a bar­rel presents a "re­ally per­sua­sive bull trap," Beu­tel said ear­lier this week. This means buy­ers may mis­in­ter­pret in­creases as a sig­nal for fur­ther prof­its. "Buy stops," or lev­els where a rally may stall, start from $89.50 a bar­rel, then $89.85, be­fore the 26-month high of $90.76, ac­cord­ing to Beu­tel. On the down­side, fu­tures may drop to as low as $88.15 be­fore a re­bound, he said.

More­over, Gaso­line ship­ments to the U.S. from Europe are poised to drop this month af­ter the profit from the trade tum­bled to a six-week low.

U.S. gaso­line was 1.1 cents a gal­lon cheaper than Europe's on Dec. 6, the biggest dis­count since Oct. 21, based on fu­tures for de­liv­ery to New York har­bor and bench­mark 95-oc­tane grade fuel in the Am­s­ter­dam-Rot­ter­damAn­twerp re­gion. It was 10.3 cents a gal­lon more ex­pen­sive than Europe's as re­cently as Nov. 29, the biggest pre­mium since Aug. 9.

Novem­ber's price gain was "tem­po­rary," said Roy Jor­dan, a London-based re­search con­sul­tant at Facts Global En­ergy. U.S. gaso­line "de­mand has fallen ver­sus last year," he said.

Euro­pean ship­ments of gaso­line to the U.S. tripled last month as the low­est Amer­i­can in­ven­to­ries in a year drove up re­turns from buy­ing in one mar­ket and sell­ing in the other. That's now evap­o­rat­ing as U.S. re­fin­ers step up pro­cess­ing rates af­ter sea­sonal main­te­nance. Stock­piles of the fuel un­ex­pect­edly rose in the week ended Dec. 3, the En­ergy Depart­ment in Washington said yes­ter­day.

The num­ber of tankers char­tered to ship gaso­line to the U.S. At­lantic Coast rose to at least 29 in Novem­ber, from 11 in Oc­to­ber, ac­cord­ing to data com­piled by Bloomberg and Clark­son Re­search Ser­vices Ltd., a unit of the world's biggest ship­bro­ker. The ves­sels car­ried 1.12 mil­lion met­ric tons, com­pared with 412,000 tons in Oc­to­ber. Gaso­line for Jan­uary de­liv­ery traded at $2.33 a gal­lon on the New York Mer­can­tile Ex­change to­day, bring­ing the gain this year to 17 per­cent. It reached $2.3699 a gal­lon on Dec. 6, the high­est price since May 4. -Bloomberg

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.