Woodside Petroleum shares rise on gas discovery

Release Date: 2010-08-16

WOODSIDE Petroleum says it has found more gas offshore Western Australia.

The discovery potentially puts an expansion of its $13 billion Pluto liquefied natural gas project back on track.

However, the find is further out to sea than other fields supporting the project.

Shares in Woodside were up 3.1 per cent to $42.78 by early afternoon, compared with 0.8 per cent decline in the benchmark S&P/ASX 200 index.

An end-of-year final investment decision target for the onshore LNG processing plant's expansion to two production units from one was notably absent from Woodside's second quarter production report last month following a few disappointing exploration results.

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Woodside said at the time it expected to update the market on the expansion's timing at the release of its first-half results, due on Wednesday.

The new discovery, Alaric-1, appears substantial.

Woodside said the well intersected a 185 metre gas column and it's still deepening the search to penetrate the full column, suggesting it could larger. It's also owned 100 per cent by Woodside.

Alaric-1 is more than 400 kilometres out to sea compared to about 180 kilometres for the original Pluto discovery. Woodside intends to transport the gas it finds to the LNG processing plant through undersea pipelines.

Woodside is also drilling the separate Larsen Deep-1 well in a joint venture with Hess Corp, which is closer to the coast, and investors will be looking for an update on that well's progress on Wednesday.

The foundation stage of Pluto is on track to ship first gas by March and a doubling of its size would substantially boost Woodside's revenues.

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