Australian giant Woodside Petroleum was dragged into the red in 2020 on the back of impairments, while its underlying results also shrank, despite record output.

Woodside posted a loss of US$4.03 billion for the year, compared to a net profit after tax of US$343 million over 2019.

Dragging the company into the red in 2020 were pre-tax impairment losses of US$5.27 billion, or US$3.92 billion post-tax, which were recognised on oil and gas properties and exploration and evaluation assets driven by a reduction in oil and gas price assumptions, increased longer-term demand uncertainty and other factors including increased risk of higher carbon pricing.

It also booked an onerous contract provision of US$447 million in relation to the company’s sale and purchase agreement related to the Corpus Christi liquefied natural gas project in the US.

Taking into account one-off costs, Woodside’s underlying net profit after tax totalled US$447 million, which was well down on 2019’s US$1.06 billion underlying result.

The fall in underlying results came as average oil prices fell 35% compared to 2019, while LNG spot prices fell 37% compared to a year ago.

The fall in commodity prices saw Woodside’s revenues tumble 26.1% in 2020, to US$3.6 billion, despite production hitting a record high of 100.3 million barrels of oil equivalent, up from 89.6 million boe the previous year.

“Our disciplined balance sheet management has safeguarded Woodside’s financial resilience and positioned us to take advantage of emerging growth opportunities as markets recover,” Woodside chief executive Peter Coleman said.

“The potential strength of that recovery is already being signalled by the recent increase in oil price and record spot LNG prices achieved in Asia over the northern hemisphere winter.”

For the year ahead, Woodside anticipates production in 2021 to total between 90 million and 95 million boe.

Capital expenditure is forecast to range between US$2.9 billion and US$3.2 billion, with the majority of spending directed towards the under development Sangomar field off Senegal and Scarborough development in Western Australia, where a final investment decision is expected later this year.

Finance

Impairments drag Australia's Woodside to a $4 billion full-year loss