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Bloomberg: Woodside Profit Falls 28% on Loss on Mauritania Sale (Update2)

By Angela Macdonald-Smith

 Feb. 20 (Bloomberg) — Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, said full-year profit fell 28 percent on a loss from the sale of fields in Africa and higher exploration costs.

Net income dropped to A$1.03 billion ($948 million) in the year ended Dec. 31, from A$1.43 billion a year earlier, Perth- based Woodside said today in a statement. Profit before one-time items slid 15 percent to A$1.18 billion, compared with a A$1.2 billion median of 12 analyst estimates compiled by Bloomberg.

Woodside, 34 percent owned by Royal Dutch Shell Plc, said last month it would book a loss on the sale of its stake in the Chinguetti oil field in Mauritania, which limited gains in production last year. The company cut its estimate of the widest category of oil and gas reserves by 24 percent, due to stricter regulations and field downgrades.

“The numbers are pretty much in line,” said Aiden Bradley, an oil and gas analyst at ABN Amro Australia Pty in Sydney. The “big” cuts to so-called contingent resources “are probably where people should focus their attention,” he said.

Woodside gained as much as A$1.76, or 3.4 percent, to A$53.02 in Sydney trading, beating an increase of as much as 1.5 percent in the Australian Stock Exchange’s benchmark energy index. The stock was at A$52.86 at 12:40 p.m. in Sydney.

Earlier this month Woodside agreed to buy Shell’s oil interests in the North West Shelf venture for $398.5 million, increasing output and reserves. The acquisition may result in an upgrade to Woodside’s full-year output forecast.

Reviewing Target

“Woodside will review its 2008 production target after the completion of the transaction,” the company said in the statement, which was lodged with the exchange. It meanwhile retained its output forecast at between 80 million and 86 million barrels of oil equivalent, an increase of as much as 22 percent from last year, buoyed by new projects.

Production will be boosted by a full-year of output from the Stybarrow field off northwestern Australia, the ramp-up of the Otway gas project in the southeast and the start-up of the Neptune, Vincent and Angel projects. Also, the expansion of the North West Shelf venture’s liquefied natural gas production is due to start up in the fourth quarter, Woodside said.

Woodside booked a A$233.1 million loss on its sale to Malaysia’s Petroliam Nasional Bhd. of its stake in the Chinguetti and other fields in Mauritania, as it concentrates on developing projects at home.

Pluto, Sunrise

The company is spending A$12 billion to build the first phase of the Pluto liquefied natural gas venture in Western Australia, including an estimated A$3.3 billion this year, and is seeking the develop LNG ventures in the Browse Basin off the northwest coast and at the Sunrise field in the Timor Sea.

Woodside is targeting the end of 2008 to approve an expansion of Pluto to add a second production line, depending on securing gas supplies either from exploration or from a third party. The expansion may be completed in 2012, it said today in a separate presentation.

The company gave 2009 as a target date to approve the Sunrise LNG project, which may be ready to start up as early as 2013, while the Browse LNG project off the far northwest coast may start up in 2013-2105, Woodside said.

The start-up targets for the LNG projects are “aspirational,” ABN’s Bradley said. “There are too many factors that they don’t control to be definitive on a timetable,” he said.

Sales rose 11 percent to A$3.84 billion on gains in production and prices. Including the Mauritanian interests that were divested sales rose 5 percent to A$4 billion.

Woodside added 108 million barrels to proven and probable reserves to 1.69 billion barrels of oil equivalent as at Dec. 31. So-called contingent resources, or potentially recoverable oil and gas volumes, dropped by 738 million barrels to 2.4 billion barrels, the company said in its annual report, also released to the exchange today.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: February 19, 2008 20:46 EST

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