Woodside Petroleum Ltd., seeking reserves to underpin an expansion of the A$13 billion ($11.6 billion) Pluto project in Australia, made a gas discovery off the northwest coast. Its shares rose the most in six months.
The Alaric well intersected about 185 meters (600 feet) of gas, Woodside said in a stock exchange statement. Australia’s second-largest oil and gas producer climbed 3.8 percent to A$43.10 by the 4:10 p.m. close in Sydney, the biggest gain since Feb. 2. The benchmark S&P/ASX 200 Index fell 0.5 percent.
Investors may respond negatively should Woodside fail to announce further drilling success at Larsen Deep, a well closer to the Pluto gas processing site, when it reports earnings Aug. 18, said Di Brookman, an analyst at CLSA Asia-Pacific Markets. The Perth-based company may not be able to make a decision to expand Pluto until the end of the first quarter of 2011 or the second, missing its end-of-2010 target, she said.
“Any gas is good gas,” Brookman said by phone in Sydney today. Even so, the Alaric well is “a long way west, so it’s distant and in fairly deep water,” she said. “Because it’s so far offshore, we’ll need a lot of gas. We’re hopeful for some news around Larsen Deep that will come out on Wednesday. If it’s lacking, it won’t be good.”
Approval of a second phase of the Pluto venture in Western Australia, one of more than a dozen proposed liquefied natural gas projects in the country targeting rising Asian demand for cleaner-burning fuel, depends on the results of the drilling campaign or talks with other gas suppliers, Woodside said in July.
Roger Martin, a spokesman for Woodside in Perth, declined to comment today on when the company expects to make a final investment decision for the second stage of Pluto.
Initial analysis indicates the Alaric discovery may be “liquids rich,” Woodside said in its statement. The Ocean America rig has been drilling Larsen Deep, while discussions continue with other gas resource owners, the company said in July. Woodside owns 100 percent of Alaric.
Hess Corp., based in New York, is the company most likely to feed gas to Pluto from fields off Western Australia, JPMorgan Chase & Co.’s Sydney-based analyst Benjamin Wilson said in July.
Pluto is scheduled to start exports in early 2011, even though labor disputes have disrupted construction, the Australian oil and gas producer said in June. The venture was 91 percent complete at the end of June, Woodside said.
BHP Billiton Ltd. is the biggest Australian oil and gas producer.