WDS - Woodside Energy Group

[divs4ever]

I hold
Possible Add, Not in a Rush

+ 1

am absolutely in no rush

the only compelling driver for me , is if you belief a major armed conflict is coming ( rather than a massive trade war )

i see lots of sabre-rattling but only with a kitchen-knife ( rattling around in the scabbard )

 

[Garpal Gumnut]

Yesterday Greg raised his recommended 'permanent' capital portfolio weighting for Woodside.

I hold
Possible Add, Not in a Rush
Daily chart looking indecisive yesterday and today? - small bodied candles, small high/low day range.

Fat Tail Investment Advisory
Greg Canavan

View attachment 209266

"Following the sell-off in Woodside Energy [ASX:WDS] shares over the past few weeks (down 15%) I am taking this opportunity to increase our weighting to 7%.

Global energy stocks remain out of favour. But if you value them on mid-cycle oil prices around US$80/bbl, they remain significantly undervalued.

WDS is no different. I don’t know what oil and gas prices will do in the short term. But longer term, probability favours higher prices. So on a long-term view, WDS is attractive value here.

For a good, common sense take on energy prices, I encourage you to listen to this (link to article for subscribers)

Action to take: Buy Woodside Energy [ASX:WDS] or add to your holdings. I am increasing the allocation in the Permanent Capital Portfolio to 7%. I will use today’s closing price as the buy price."

I'd agree with you @finicky . Tell him 'e's dreamin'.



gg

 

[Antirnator]

If low $21 arrives I might add.

Held

 

[Garpal Gumnut]

Drilling and processing oil is an expensive business as is finding the stuff in the first place. When I was in my late teenage years I had a mate who worked as a driller's offsider offshore in the Gulf of Mexico and he was earning a packet. I cannot see how the bottom line can increase for WDS with a WTI Crude price of $62.64 with Trump determined to keep his Maga supporters burning the stuff doing wheelies and whatever MAGA supporters do when they are not praying to the good lord.

I'd at the most put WDS as a hold because it is a matter of time before the POO rises again which is not to say it won't fall further first or stay in the 60's for a lot longer. The bean counters can fiddle the figures, lower the divies and plan capital raises on some temporary good news, but imo the good times are not anytime soon. @antinator is looking at $21. Divsie @divs4ever from memory was looking at $17. @finicky is holding which long term is not a bad idea as with the state the world is in he could be right and oil could rise. You need oil for wars.

gg

 

[finicky]

I cannot see how the bottom line can increase for WDS with a WTI Crude price of $62.64

@Garpal Gumnut Greg is expecting a return to a more normal price. I am unintellectually expecting more than that eventually.

But if you value them on mid-cycle oil prices around US$80/bbl, they remain significantly undervalued.

Also Woodside has development projects maturing.

 

[divs4ever]

I am unintellectually expecting more than that eventually.

the debt-pigs in the West can't afford even $US 70 for long , as their economies shrink and debt loads grow

so the question is .. how long is OPEC going to be accommodative given costs ( including shipping costs and insurance premiums ) are rising

if the West can get itself into a BIG war and abandon any pretense of fiscal discipline , oil will go to a fair price ( and beyond )

if the West gets itself into a trade war , the two beating hearts of manufacturing ( China and India ) will be on 'the other side' that will make Western 'manufacturing ' ( assembly of out-sourced parts ) hit all sorts of supply chain blocks .

so for the West the situation is demand vs cost the more oil costs the less they can pay for

Trump is hoping to loot all that Venezuelan oil and get a stable supply of diesel ( after the US refines it )

 

[Antirnator]

the debt-pigs in the West can't afford even $US 70 for long , as their economies shrink and debt loads grow

so the question is .. how long is OPEC going to be accommodative given costs ( including shipping costs and insurance premiums ) are rising

if the West can get itself into a BIG war and abandon any pretense of fiscal discipline , oil will go to a fair price ( and beyond )

if the West gets itself into a trade war , the two beating hearts of manufacturing ( China and India ) will be on 'the other side' that will make Western 'manufacturing ' ( assembly of out-sourced parts ) hit all sorts of supply chain blocks .

so for the West the situation is demand vs cost the more oil costs the less they can pay for

Trump is hoping to loot all that Venezuelan oil and get a stable supply of diesel ( after the US refines it )

President Trump says he wants to keep the oil price low to put pressure on Russia. Other there really other side benefits.

Venezuela can afford to throw cheap peasants at low oil prices.

 

[divs4ever]

President Trump says he wants to keep the oil price low to put pressure on Russia. Other there really other side benefits.

Venezuela can afford to throw cheap peasants at low oil prices.

so ... how much oil does Russia sell ( directly ) to the US ?

the EU sanctioned Russia so now buy Russian oil after China and India refine it for them and slanted the sanctions so the EU/UK mo longer even feast on the insurance premiums ( of shipping Russian oil )

and Venezuela is sanctioned by the US , so has little incentive to sell it to the US or even Brazil , why not use it at home ( unlike most of Australian oil )

AND if the oil price is too low the US can't produce it at a profit

 

[Antirnator]

so ... how much oil does Russia sell ( directly ) to the US ?

the EU sanctioned Russia so now buy Russian oil after China and India refine it for them and slanted the sanctions so the EU/UK mo longer even feast on the insurance premiums ( of shipping Russian oil )

and Venezuela is sanctioned by the US , so has little incentive to sell it to the US or even Brazil , why not use it at home ( unlike most of Australian oil )

AND if the oil price is too low the US can't produce it at a profit

why would the US buy Russian oil?... it is about having another lever to stop the war in Ukraine

I am sure the US will be fine on the oil front

Europe not so much but they are already in economic trouble. 800000 public sector workers are striking in France and Germany is in a recession. I guess Trump will have to help them get some oil, the middle east are good friends of Trump . Maybe Britain needs to reopen the North Sea stuff.

It is amazing how much the Paris climate change agreement helped Russia and China. Economics is like a boat in rough seas, you never know when the next wave is going to hit or when someone will do something stupid.

 

[Smurf1976]

China's demand for LNG keeps on growing, and it's pretty much becoming a country in its own lane.

Where this gets tricky in my view is with Russia being the largest holder of known gas reserves globally and on better terms with China than they are with most countries.

For Woodside it's the global LNG market that'll count, since it's readily shippable, but I'm cautious in China / Russia in terms of the potential for them to do some sort of deal.

On the other hand on that theme, anything that dents Russian (or anywhere else) oil production to any meaningful extent, and there are certainly people trying to do that, is bullish for the oil price.

 

[Value Collector]

Where this gets tricky in my view is with Russia being the largest holder of known gas reserves globally and on better terms with China than they are with most countries.

For Woodside it's the global LNG market that'll count, since it's readily shippable, but I'm cautious in China / Russia in terms of the potential for them to do some sort of deal.

On the other hand on that theme, anything that dents Russian (or anywhere else) oil production to any meaningful extent, and there are certainly people trying to do that, is bullish for the oil price.

Russia is certainly a player in the LNG market, but the majority of its Natural Gas reserves are in west Siberia, which is actually a very long way from Chinese markets for a pipeline and difficult for shipping LNG.

On a map it looks like Russia and China are close, but when you look where the actual Chinese markets are eg on the coast way in the east, and where Russias gas is eg way to the west with no access to warm water ports, it’s a very long way, so Australia would have some very good economic advantages.

Russias natural market is pipeline gas to Europe, and they have shot themselves in the foot there.

 

[TimeISmoney]

Where this gets tricky in my view is with Russia being the largest holder of known gas reserves globally and on better terms with China than they are with most countries.

For Woodside it's the global LNG market that'll count, since it's readily shippable, but I'm cautious in China / Russia in terms of the potential for them to do some sort of deal.

On the other hand on that theme, anything that dents Russian (or anywhere else) oil production to any meaningful extent, and there are certainly people trying to do that, is bullish for the oil price.

China is energy hungry, and they'll take what they can get.

Those new ports they've built will all be sending gas to China.

From what I believe that's coming out from on the ground, is once they get all the new equiptment up and running, the efficiency of the site will be up.

 

[Value Collector]

China is energy hungry, and they'll take what they can get.

Those new ports they've built will all be sending gas to China.

From what I believe that's coming out from on the ground, is once they get all the new equiptment up and running, the efficiency of the site will be up.

@Smurf1976

Here is a map showing the route LNG cargos from Russia need to take vs Australian Cargos. The solid red line is the Arctic route which is closed for many months during winter unless Nuclear Ice breakers escort the LNG ship, which adds cost. The dotted line is the longer route that is open year round, but it’s 4 times the distance as Australian cargos make, even longer if Suez Canal is closed and the ship has to round Africa.

Even if the ship takes the warm water route it still requires ice breakers to escort to and from the port in winter.

Australian LNG cargos have a significant cost advantage.

 

[divs4ever]

Russias natural market is pipeline gas to Europe, and they have shot themselves in the foot there.

yes , Europe certainly has , the coming Winter ( in Europe ) should be very educational , now in the level of the Danube should drop again .....

 

[divs4ever]

surely Russia would be looking/thinking of pipelines through Afghanistan ( and Pakistan ) into India

will take some time to finish , but certainly will negate maritime insurance policies

 

[Value Collector]

surely Russia would be looking/thinking of pipelines through Afghanistan ( and Pakistan ) into India

will take some time to finish , but certainly will negate maritime insurance policies

Pipelines are a good way to transport gas, but the initial investment is huge, takes a long time to build, and needs to go over some trouble some routes to get to either India or China, and probably be more a lot more expensive than LNG ships from Australia.

Not to mention India is on the doorstep of the Middle East neighbors with plenty of gas to sell, a pipeline from IRAN to India would make more sense.

The reason I say the Russians have shot them selves in the foot is that they already have good pipelines heading west into Europe that are laying idle, with more capacity than the prospective line to China will have.

 

[Dona Ferentes]

from another thread .. the proposed Druzhba pipeline into China

.
Mercator and other projections are distortions.

 

[Smurf1976]

@Smurf1976

Here is a map showing the route LNG cargos from Russia need to take vs Australian Cargos.

I wasn't thinking of LNG so much as a direct pipeline.

I'm not saying it will happen, but I'm always cautious of any situation where someone has a "big gun" in whatever context that could be used if they really wanted to.

If they really wanted to build a pipeline, it's possible, it could be done.

I'm not saying avoid investing in Woodside, just that the geopolitical aspect of oil and gas is always something to keep a watch on with any related company in my view. Bearing in mind there's the potential for impacts in either direction - eg if Russian oil production drops, that's bullish for price, etc.

 

[divs4ever]

Pipelines are a good way to transport gas, but the initial investment is huge, takes a long time to build, and needs to go over some trouble some routes to get to either India or China, and probably be more a lot more expensive than LNG ships from Australia.

Not to mention India is on the doorstep of the Middle East neighbors with plenty of gas to sell, a pipeline from IRAN to India would make more sense.

The reason I say the Russians have shot them selves in the foot is that they already have good pipelines heading west into Europe that are laying idle, with more capacity than the prospective line to China will have.

maybe expensive initially , but the West is trying to restrict shipping routes

and can Australia be trusted as a trading partner when it habitually plays tag-along-Charlie to the US and UK ?

and Iran to India ( again through Afghanistan , partly funded by Russia and China .. well worth the PR to win over under-explored Afghanistan ) doesn't necessarily mean direct competition , say Iran gas and Russian oil or vice-versa

so don't tell me you believe the Russians blew up 3 of the 4 Russian Nordstream pipelines , even Europe now claims it was the Ukraine Gilligan and crew in a pleasure yacht ( not the Russians )

chances are the Russians have salvaged all the plant in the three destroyed pipelines , maybe even from the fourth pipeline ( which wasn't just in use ) given the seized assets ( in Germany ) i don't see any reason fort Russia , to even talk trade with Germany , let alone plan to trade with them again

if the Nordstream pipelines are so useful maybe Germany should redirect them to Norway ( and see who blows them up this time )

i note the lack of howling from 'Green ' groups at the sudden release of all that gas into 'the climate change '

 

[divs4ever]

I wasn't thinking of LNG so much as a direct pipeline.

I'm not saying it will happen, but I'm always cautious of any situation where someone has a "big gun" in whatever context that could be used if they really wanted to.

If they really wanted to build a pipeline, it's possible, it could be done.

I'm not saying avoid investing in Woodside, just that the geopolitical aspect of oil and gas is always something to keep a watch on with any related company in my view. Bearing in mind there's the potential for impacts in either direction - eg if Russian oil production drops, that's bullish for price, etc.

i hold WDS , but would urge caution for new-comers to the stock , it can disappoint in the short-term and now has a crapload of ex-BHP assets it has to integrate into the company ( 'transformational ' i think was the claim about the deal )

remember China now has a lot of investment money that is no longer going into US bonds , i expect much of that will be invested in BRICS allies ( like Indonesia )