{"id":52986,"date":"2014-06-18T19:39:56","date_gmt":"2014-06-18T23:39:56","guid":{"rendered":"http:\/\/countingpips.com\/?p=52986"},"modified":"2014-06-18T19:39:56","modified_gmt":"2014-06-18T23:39:56","slug":"why-the-woodside-petroleum-share-price-fell-yesterday","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/why-the-woodside-petroleum-share-price-fell-yesterday\/","title":{"rendered":"Why the Woodside Petroleum Share Price Fell Yesterday"},"content":{"rendered":"
June 18, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What Happened to the Woodside Petroleum Share Price?<\/h2>\n

Shares of Woodside Petroleum [ASX:WSA]<\/strong> fell by 4.57% on Tuesday, closing at $40.88.<\/p>\n

Why Did This Happen to the Woodside Petroleum Share Price?<\/h2>\n

Woodside Petroleum is Australia\u2019s premier oil and gas company. Woodside\u2019s flagship project is the North West Shelf project, which contains liquefied natural gas facilities. <\/p>\n

Punters saw the biggest price drop since last July when Royal Dutch Shell sold a 9.5% stake in the company. Formally, Shell held 19.9% of the company. It plans to sell-down $US5 billion of its stock, eventually cutting its stake to just 4.5%<\/p>\n

What Now For Woodside Petroleum?<\/h2>\n

This shouldn\u2019t be a shock to investors. Shell has long-stated its plans to reduce investments in non-core assets, and the market has long speculated that Shell would sell its 23.1% stake in Woodside. These rumours have been a problem hanging over the share price for years.<\/p>\n

Shareholders should welcome the move as it opens the door to a US$2.68 billion share buyback, which will reduce share price volatility from the sell down. Furthermore, Woodside management has promised shareholders that it will pay out 80% of earnings for the foreseeable future.<\/p>

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The healthy share buyback program and dividend yield should help shareholders sleep at night. <\/p>\n

Nonetheless, I have concerns over the company\u2019s business plan. <\/p>\n

North West Shelf is due for a production decline in 2019. This means that Pluto\u2019s one LNG train operation will be heavily relied upon to pay shareholders dividends, which is concerning because of the gas supply issues at the project. It\u2019s unlikely that Pluto will ever be expanded.<\/p>\n

So what else does the company have? <\/p>\n

Too be honest, not much. What I find more concerning is Woodside\u2019s growth pipeline, or lack thereof. There are still a number of years before the Browse floating LNG project achieves production.<\/p>\n

To fill the looming growth hole, I expect that Woodside will eventually go on an acquisition splurge. As such, Woodside should be careful about how much it pays in dividends.<\/p>\n

At the end of the day, Woodside is a shareholder friendly company that offers what punters want in a low interest rate environment \u2014 a high dividend yield. <\/p>\n

Jason Stevenson+<\/a>
\n Resources Analyst, Diggers and Drillers<\/em><\/strong><\/p>\n<\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What Happened to the Woodside Petroleum Share Price? Shares of Woodside Petroleum [ASX:WSA] fell by 4.57% on Tuesday, closing at $40.88. Why Did This Happen to the Woodside Petroleum Share Price? Woodside Petroleum is Australia\u2019s premier oil and gas company. Woodside\u2019s flagship project is the North West Shelf project, which contains liquefied natural […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-52986","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=52986"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52986\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=52986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=52986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=52986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}