Offside on LNG tumble

PLUNGING oil and gas prices have almost halved revenue at energy giant Woodside Petroleum.

Sales revenue of $US898 million ($A1.22 billion) in the three months to June was down 47 per cent from $US1.68 billion a year ago, mainly due to plummeting prices for liquefied natural gas.

The company’s production of LNG was also lower than a year ago, due to planned outages at its Pluto plant off the coast of Western Australia.

Some of that reduction was offset by a lift in volume mostly through new oil production from the Balnaves field, also off WA.

Woodside snapped up Apache Corporation’s 65 per cent stake in Balnaves in a $US2.8 billion deal finalised in April.

LNG prices are linked to crude oil prices, which dived sharply in late 2014 due to an oversupply in the market, driven by US shale oil production and the Organisation of the Petroleum Exporting Coun- tries cartel’s refusal to cut supply.

Woodside said the delayed slide in prices received for its LNG was linked to a fourmonth lag in the Japanese crude oil import price, on which the company’s contracts are based.

Japanese crude prices dropped 35 per cent during the quarter to $US64 a barrel, the company said. Woodside produced 20.1 million barrels of oil equivalent during the June quarter, down nearly 8 per cent on the March quarter.

In its production report, Woodside was also at pains to point out its proposed Browse floating LNG joint venture off the north WA coast had entered front-end engineering and design during the quarter.

The company’s reduced sales revenue was within market expectations.

Woodside shares dropped 39c, or 1.1 per cent, to $34.57.