Record quarterly sales can’t stop the Woodside (ASX:WPL) share price falling today

Woodside had a strong fourth quarter…

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Key points

  • Woodside shares are falling despite record quarterly revenues
  • The energy producer has been benefiting greatly from high energy prices
  • Woodside is planning to merge with BHP’s petroleum assets in 2022

The Woodside Petroleum Limited (ASX: WPL) share price is falling today.

In morning trade, the energy producer’s shares are down slightly to $25.38.

Why is the Woodside share price falling today?

The Woodside share price is falling today despite the announcement of record revenues in FY 2021.

According to the release, for the fourth quarter of FY 2021, Woodside delivered an 86% quarter on quarter increase in sales revenue to US$2,852 million. This was driven by a 22% increase in sales volume to 31.8mmboe and a 53% lift in its average realised price to US$90 per barrel of oil equivalent.

For the full year, revenue is expected to be US$6,973 million. This is almost double the revenue of US$3,612 million recorded in the previous year.

Potentially holding back the Woodside share price today was its production, which came in at 22.6mmboe. While this was up 2% quarter on quarter, it was down 9.2% from the prior corresponding period. This took its full year production to 91.1mmboe, which is down from the record production of 100.3mmboe it achieved a year earlier.

Looking ahead, management expects its production to improve in FY 2022, though it doesn’t expect to reach the record levels of FY 2020. It has guided to production of 92mmboe to 98mmboe, excluding any impact from the proposed merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

Management commentary

Woodside’s CEO, Meg O’Neill, was pleased with the quarter and the full year.

She said: “The 86% increase in sales revenue for the quarter was underpinned by a 22% increase in sales volume as well as significantly stronger average realised prices. We achieved our highest quarterly sales revenue on record. The upward trajectory in global oil and gas prices resulted in a portfolio realised price of $90 per barrel of oil equivalent and a strong realised LNG price of $93 per barrel of oil equivalent. This increase in realised price demonstrates the continued strong demand for LNG and improvement in the trading environment over the course of 2021.”

O’Neill also spoke positively about the proposed merger with BHP’s petroleum assets.

She said: “We signed a binding share sale agreement for the merger of BHP’s oil and gas portfolio with Woodside. The merger will deliver increased scale, diversity and resilience to better navigate the energy transition and will provide the financial strength to help fund planned developments in the near-term, invest in future energy opportunities and return value to our shareholders through the cycle.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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