Australian No.1 oil and gas producer Woodside Energy said second-quarter sales tumbled due to weaker commodity prices and maintenance work, missing analyst forecasts, although its shares rose as it stuck to longer-term production guidance.
Oil and gas prices have retreated from the levels hit in 2022 following Russia's invasion of Ukraine, with a slower-than-expected economic recovery in key consumer China weighing on fuel demand.
Oil producers are however expected to grow profits due to supply constraints until the Organization of the Petroleum Exporting Countries (OPEC) and major producers including Russia, together known as OPEC+, raise production in 2024.
Woodside said on Wednesday that revenue came in at $3.08 billion for the three months to June 30, from $3.44 billion a year earlier and missing a UBS estimate of $3.33 billion.
The Perth-based company produced 44.5 million barrels of oil equivalent (mmboe) in the period, up from 33.8 mmboe in the year-earlier period, although its average realised liquefied natural gas price fell to $63 per barrel of oil equivalent (boe) from $95 a year earlier.
The company maintained its full-year production and capital expenditure guidance, which included a delay of about half a year and a cost overrun at its Senegal Sangomar project in Africa disclosed a day earlier.
Shares of Woodside were up 1.6% by midsession, outperforming a 0.5% rise in the broader market .AXJO, as investors bet on the company's ability to benefit from supply shortages despite uncertainties related to individual projects.
"Woodside has the potential to improve its performance in the upcoming quarters, or at least maintain it around similar levels, considering the forecast supply crunch amid global output cuts and OPEC+ situation," said E&P Financials analyst Adam Martin.
Woodside CEO Meg O'Neill said delaying Sangomar was "a difficult decision but a very prudent one" and the project was tracking on schedule other than the recently discovered piping defects which led to the delay.
"We've got high confidence that we'll be able to meet the updated cost range and first oil schedule," she said in an interview.
(Reporting by Roushni Nair and Nausheen Thusoo in Bengaluru; Editing by Subhranshu Sahu and Stephen Coates)