Woodside Petroleum Ltd., Australia’s second-biggest oil producer, is likely to be an underperformer in Sydney trading because of uncertainty that it will deliver its natural gas projects, RBC Capital Markets said.
RBC has a 12-month price target of A$40 on Woodside’s shares, with an ‘underperform’ rating, Andrew Williams, an analyst at RBC, said yesterday in a report. Perth-based Woodside rose 0.7 percent to A$35.39 at the 4:10 p.m. close in Sydney today.
Woodside plans to expand the A$14.9 billion ($14.6 billion) Pluto liquefied natural gas venture in Western Australia and develop the Browse and Sunrise LNG projects. Those are among more than A$200 billion of proposed Australian LNG developments seeking to tap Asian demand.
“These stranded gas resources are world-class in scale, but come with execution risks that we believe may be somewhat beyond the control of the company to manage,” Melbourne-based Williams said.
Royal Dutch Shell Plc, Europe’s largest oil company, is likely to sell its remaining 24 percent holding in Woodside, which “has the potential to put a ceiling on stock performance for at least the next 12 months,” according to RBC.