Woodside Petroleum Limited
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Oil, Gas & Consumable Fuels
What does Woodside Petroleum Limited (WPL) do and how does it earn money?
The short answer is oil and gas. The longer answer: Woodside Petroleum is an explorer, evaluator, developer, producer, marketer and seller of hydrocarbons throughout the Asia Pacific, Canada, Africa, and around the world. Meaning pipeline natural gas (PNG), liquefied natural gas (LNG), condensate, liquefied petroleum gas, and crude oil.
Founded in 1954 and headquartered in Perth, Woodside currently has four gargantuan hydrocarbon producing projects:
North West Shelf Project — Located in the north-west of Western Australia (WA), the project has been Australia’s biggest resource development project for 37 years. The project produces PNG and LNG from four assets: Karratha Gas Plant, North Rankin Complex, Goodwyn A Platform and the Angel Platform. Woodside’s stake is 16.67% shared with five other partners.
Pluto LNG — The Pluto LNG project processes gas from the offshore Pluto and Xena gas fields in WA. The project is underpinned by a long-term sales agreement with Kansai Electric and Tokyo Gas who both hold a 5% stake. The project comprises five assets including Pluto LNG, Pluto-A Offshore Platform, Pluto Operations Centre, Pluto Train 2 and Pluto-NWS Interconnector.
Australia Oil — Located offshore 50 kilometres north-west of Exmouth, WA, the project produces crude oil. As the operator, Woodside holds a 60% stake in the project, while Mitsui E&P Pty Ltd owns the remaining 40%. The project comprises two assets, the Ngujima-Yin Floating Production Storage and Offloading (FPSO) vessel and Okha FPSO vessel.
Wheatstone — The Wheatstone project processes gas from the offshore Wheatstone, Iago, Julimar and Brunello gas fields. The project consists of an offshore platform located 220km from Onslow in WA and is connected by a trunkline to an onshore plant consisting of two LNG trains, a domestic gas plant and associated infrastructure.
Woodside also has exploration, evaluation and development projects in Scarborough and Browse, Western Australia; Kitimat, Canada, for LNG, PNG and condensate; and Sangomar, Senegal for crude oil.
Is Woodside Petroleum a profitable company?
Yes, the company is profitable at this time. In FY2021, Woodside earned a full-year net profit after tax of $2.64b. The company’s free cash flow arrived at $4.86b.
However, in FY2020, the company recorded a net loss of $5.85b due to struggles brought about by the outbreak of COVID-19. Woodside stated:
“Our reported loss of US$4,028 million (A$5.85b) reflects major writedowns of our assets announced in July as the COVID-19 pandemic and dramatic oil price plunge created uncertainty in global markets and slashed our revenue.”
In FY2017, FY2018 and FY2019, Woodside earned a profit of $1.39b, $1.93b and $493.6m.
Is Woodside Petroleum a good investment?
Some investors are bullish on WPL stock as the company is financially strong and has paid dividends for decades (except in 2001 and 2002). While the company encountered a hiccup with heavy net losses in FY2020 due to COVID-19 impacts, it bounced back strong in FY2021.
Woodside also recently signed a binding share sale agreement with BHP Group (BHP). Woodside CEO Meg O’Neill stated:
“We will have the balance sheet, cash flow and financial strength to help fund planned developments in the near-term, invest in future energy opportunities and return value to our shareholders through the cycle."
Other investors continue to be wary of the effects of inflation, escalating interest rates, the war between Russia and Ukraine, geopolitical tensions between Australia and China and the possible decline of financial markets worldwide.
Does WPL stock pay dividends?
Yes, WPL stock pays dividends, usually twice a year. The company has been paying dividends since 1991, except for 2001 and 2002 when no distributions were made.
In 2021, Woodside paid a dividend of $0.153 in March and another dividend of $0.413 in September. The company’s March 2022 dividend payment was $1.46.
Woodside also offers owners of WPL stock a way to automatically reinvest distributions via a dividend reinvestment plan (DRP).
Who owns WPL stock?
The general public holds 71.5% of all WPL stock. They are followed by institutional investors that hold 27.7% of the float, private companies holding 0.7% and individual insiders who hold 0.04%.
Some institutions with the largest holdings include BlackRock (5.82%), The Vanguard Group (5.76%), Massachusetts Financial Services Company (0.68%), Dimensional Fund Advisors LP (0.58%), Geode Capital Management (0.56%), CPU Share Plans Pty Limited (0.49%), Alliance Bernstein L.P. (0.42%) and Invesco Ltd (0.35%).
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.