Oil price to temper Woodside AGM

Woodside Petroleum fronts shareholders today to mark a transformational 12 months though celebrations are likely to be muted because oil and gas prices have halved since last year's annual meeting.

Australia's biggest oil and gas company yesterday laid bare the full impact of the plummeting energy prices when it reported a 20 per cent slump in March-quarter sales revenue to $US1.4 billion ($1.8 billion), even though sales volumes were largely unchanged at 23.9 million barrels.

It was the first big oil price slump impact reported by Woodside and paints a tough picture for its full-year sales performance, and therefore profits and an ability to maintain a high level of dividend payments.

Analysts have already assumed Woodside will not be able to repeat the record feat of paying shareholders $3 a share in dividends based on last year's stellar profit.

Woodside shares yesterday firmed 16¢ to $35.41 but remain at a two-year low, a victim of the global oil price crisis.

The slump in sales revenue marred an otherwise busy March quarterly report for Woodside, which included updates on the impact of its $US3.7 billion acquisition of Apache's stakes in the Balnaves oil (WA) and Wheatstone (WA) and Kitimat (Canada) LNG projects.

Woodside's proved developed and undeveloped reserves, which provide the most certain picture of how much oil and gas the company has, increased 18 per cent to 1.24 billion barrels.

The increased 1P reserves figure does not include Kitimat, a massive onshore shale gas resource that Woodside wants to eventually develop in conjunction with operator Chevron.

Kitimat's addition helped to boost Woodside's best-estimate contingent resource by 2.6 billion barrels, or 151 per cent, to 4.4 billion barrels.

Although Kitimat's development is a long-term prospect only, appraisal drilling is under way - seven wells are planned this quarter - to contribute to Woodside's oil and gas production.

Wheatstone will not produce first gas until the end of next year.

The combination of Kitimat's modest gas flows and Balnaves' oil output is expected to be worth two to three million barrels to Woodside this year, down on guidance in February of up to four million barrels because of a revision of Kitimat's progress.

As a result, Woodside yesterday trimmed its full-year output guidance of between 87mb to 95 mb to a new range of 86mb to 94mb. It left its forecast output for its most important asset, the Pluto LNG plant near Karratha, unchanged despite a six-day operational shutdown in the wake of cyclone Olwyn.