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Will Woodside Petroleum shares rise in 2014?

With many investors focused squarely on the massive LNG projects that are soon to be completed by the likes of Santos (ASX: STO) and Origin Energy (ASX: ORG), it feels like Woodside Petroleum (ASX: WPL) flew under the radar somewhat in 2013.

Shares in Woodside are up 11% for the last 12 months, slightly lagging the 13.8% rise of the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). However as a strong performer with good long-term prospects, the company may attract increased interest heading into 2014.

Since the start-up of Pluto LNG in 2012, Woodside has delivered consistent and steady cash flows supported by strong LNG production that is set to continue into 2014. After a bruising year for many of Australia’s other top 20 companies, the haven of reliable earnings may be a welcome relief for investors.

The cash flows deliver a reliable dividend that included a special bonus payment in 2013. Dividend seeking investors will also be enticed by the dividend being set in U.S. dollars. If the U.S. economy continues to strengthen and push up the U.S. dollar it will mean higher yields for investors when converted into Aussie dollars.

A stronger U.S. economy in 2014 will also likely see a rise in oil prices as demand rises. Since many LNG contracts are linked to the price of oil, this could translate into higher sales revenue.

Woodside’s exploration program is set to continue taking big steps in 2014. New exploration permits granted in conjunction with New Zealand Oil and Gas (ASX: NZO), will see Woodside exploring New Zealand’s Taranaki Basin with results expected in late 2014, while progression with exploration in Ireland’s Porcupine Basin will also be on the cards.

The New Year should also bring an update on Woodside’s projects in the Browse Basin and Israel’s Leviathan gas field, both of which have been shrouded in uncertainty this year. The projects have significant growth potential, but have faced political delays and roadblocks throughout 2013.

Foolish takeaway

If positive operating conditions can continue to gather momentum in 2014 it is feasible that Woodside will see increasing investor interest. If this is combined with positive exploration or project results, Woodside’s share price could march higher in 2014.

There may be a stock with stronger prospects than Woodside!

Discover The Motley Fool's favourite income idea for 2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2014."

Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.

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