WOODSIDE SET TO CASH IN ON LNG BOOM

WOODSIDE Petroleum expects booming oil and gas prices to lift earnings in the fourth quarter of 2021 as it targets sealing a $40bn merger with BHP Petroleum and sanctioning its giant Scarborough LNG project before year-end.

Oil at multi-year highs and soaring Asian LNG spot prices have buoyed the earnings fortunes of Australian energy producers although a pricing lag will mean windfall gains will not filter through until the close of the December quarter.

“We expect in the fourth quarter to see the benefit of stronger pricing on our realised prices, reflecting the oil price lag in many of our contracts and recent increases in gas hub prices,” Woodside chief executive Meg O’Neill said on Thursday.

The producer recorded a 19 per cent lift in third-quarter sales revenue to $US1.531bn from the prior three months despite production dipping 2 per cent to 22.2m barrels of oil equivalent amid maintenance works.

Woodside was criticised by some in the market for having too much of its LNG exposed to the spot market when prices hit lows of just $US2 per million British thermal units in June 2020. However, spot prices have now surging beyond $US30mbtu.