Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

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Equity Bottom-Up

<p>As Australia's premier dedicated oil and gas player, Woodside Petroleum possesses operations encompassing liquefied natural gas, natural gas, condensate, and crude oil. LNG is the mainstay, with more than 20 years' successful delivery of cargoes to East Asian customers. Woodside has operatorship and a one-sixth share in the North West Shelf Joint Venture, or NWS/JV, on the north-west coast of Western Australia. Under its watch, the number of LNG trains has grown from one to five, taking gross output to 16.4 million metric tons per year. This pedigree is unmatched in the Australian oil and gas space, and there's more potential development in the pipeline if prices will allow. Missteps, including commissioning delays and cost blowouts during the China-driven resources boom, are now past. Woodside has demonstrated commendable conservatism in capital allocation over several years.</p><h2>Key Investment Considerations</h2><ul><li>More than 80% of our Woodside fair value estimate derives from one product, LNG. LNG prices are referenced on a three-month running lag to the Japanese Customer Cleared oil price, so oil prices are key to any analysis.</li><li>Including Pluto Train 2 and Wheatstone, around 30% of our fair value estimate derives from projects yet to produce any gas, reflecting our expectation for substantial growth.</li><li>We are comfortable with a high proportion of value in development projects, given Woodside's proven LNG delivery platform and first-mover advantage on the North West Australian coast.</li></ul><p><em>Analyst: Mark Taylor</em></p>

As Australia's premier dedicated oil and gas player, Woodside Petroleum possesses operations encompassing liquefied natural gas, natural gas, condensate, and crude oil. LNG is the mainstay, with more than 20 years' successful delivery of cargoes to East Asian customers. Woodside has operatorship and a one-sixth share in the North West Shelf Joint Venture, or NWS/JV, on the north-west coast of Western Australia. Under its watch, the number of LNG trains has grown from one to five, taking gross output to 16.4 million metric tons per year. This pedigree is unmatched in the Australian oil and gas space, and there's more potential development in the pipeline if prices will allow. Missteps, including commissioning delays and cost blowouts during the China-driven resources boom, are now past. Woodside has demonstrated commendable conservatism in capital allocation over several years.Key Investment ConsiderationsMore than 80% of our Woodside fair value estimate derives from one product, LNG. LNG prices are referenced on a three-month running lag to the Japanese Customer Cleared oil price, so oil prices are key to any analysis.Including Pluto Train 2 and Wheatstone, around 30% of our fair value estimate derives from projects yet to produce any gas, reflecting our expectation for substantial growth.We are comfortable with a high proportion of value in development projects, given Woodside's proven LNG delivery platform and first-mover advantage on the North West Australian coast.Analyst: Mark Taylor

Woodside Petroleum Boasts a World-Class Portfolio of Gas-For-Export Growth Assets