ASX oil and gas majors set to report a massive 12 months, just like the global energy giants of old
Australian oil and gas majors are likely to report some very strong financial performances in fiscal 2022, mirroring the rip-roaring performance of US superpowers Exxon and Chveron.
High oil and gas prices are expected to deliver unto Exxon a record profit of US$56bn while Chevron is expected to log earnings of more than US$37bn according to the Financial Times.
Woodside has already reported record revenue of $5.86bn in the third quarter of 2022, up from revenue of $3.44bn in the second quarter, though a large part of this is due to the first full quarterly contribution from its former BHP petroleum assets.
Assuming that this amount remains consistent in the fourth quarter, our largest oil and gas player could be reporting revenues of about $17.5bn.
Profit is likely to be equally solid given that its half-year net profit after tax was $1.64bn, not Exxon territory but still a strong result.
The major is certainly confident about its production prospects this year with the delivery of Sangomar in late 2023 and the start-up of Mad Dog Phase 2 in mid-2023 expected to offset a four-week turnaround at Pluto LNG to deliver production of between 180 million and 190 million barrels of oil equivalent (MMboe).
Santos is also delivering the goods with the company noting in November that it had generated strong free cash flow of US$2.7bn to the end of September, which has in turn fuelled an expansion of its share buyback scheme by a further US$350m.
Revenues hit US$5.9bn for the three quarters to 30 September 2022, up more than US$2bn from the half-year and placing the prospect of hitting US$8bn in revenues for the full-year well within reach.
Production-wise, the Adelaide-based company expects to produce 103MMboe and 106MMboe in 2022 though the end of field life at Bayu Undan and a sell down of a 5% interest in PNG LNG is expected to reduce 2023 production to the range of 91MMboe to 98MMboe.
At the mid-end of the market, Beach Energy (ASX:BPT) is likely to see strong revenues for 2022 despite the impact of a one-off accounting change relating to new arrangements with Santos for processing and transportation of Beach’s Cooper Basin oil and liquids.
While the company works on the more traditional (in Australia) financial year which starts on 1 July, it posted revenue of $458m in the quarter ended 31 March 2022, $504m for the June 2022 quarter and $437m in the September 2022 quarter due to higher gas production and realised prices.
Further growth is expected from the company’s projects in the Otway and Perth basins, which are expected to come on line in the 2024 financial year.
The former is especially important as it will increase Beach’s share of East Coast gas demand from 12% to 16%, which is likely to deliver rewards given ongoing concerns about gas supply security on the East Coast.
The Waitsia Stage 2 project is also expected to deliver LNG revenue for the company, which will add further to its growth.