*Regan subscribes to the Foolish philosophy finding and buying shares in great businesses that can grow and reinvest at high rates of return to compound wealth for decades to come. I must admit, buying shares in oil and gas producer The recent fall in oil prices has been partly cushioned by the depreciation in the Aussie dollar and as a low-cost producer Woodside offers strong up-side potential if oil prices rise.Before buying shares however, there are three things I think are important to check:Woodside had 2P (proved plus probable) reserves of 1,238 million barrels of oil equivalent (mmboe) at the start of 2019.If Woodside keeps pumping oil and gas at the same rate as it did in 2018 (91.4 mmboe), the company would have enough 2P reserves for the next 13.5 years. Output in the first half was 39 million boe.The start-up of the Greater Enfield oil project off WA is due in August, while since the end of the first half, production has restarted at the Vincent wells. Investing is about looking forward though and both Santos and Woodside are expecting to grow production, which will … Next year, the Australian oil business is expected to deliver more than 10 million barrels of output, while Woodside's share of the Chevron-run Wheatstone LNG plant is expected to yield more than 13 million boe.But JPMorgan analyst Mark Busuttil described the first-half result as "weak", saying operating costs and the tax rate were higher than expected. For more information please see our The Motley Fool Australia, PO Box 4635, Ashmore, Qld 4214Foolish analyst/writer Regan Pearson has been writing for the Motley Fool since 2012.
Commodity prices are volatile and unpredictable.
That was partly offset by a $US15 million positive impact from sourcing replacement cargoes. So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered! Woodside Petroleum has posted a bigger-than-expected 23 per cent slide in first-half profit, impacted by outages that hit production, together with higher operating and taxation costs. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more. Woodside Petroleum has posted a bigger-than-expected 23 per cent slide in first-half profit, impacted by outages that hit production, together with higher operating and taxation costs.Shares in the oil and gas producer were down about 5 per cent in early trading after it report net profit dropped to $US419 million ($620.6 million) for the six months ended June 30, on sales that dipped 5 per cent to $US2.26 billion.Production was impacted by an extended maintenance shutdown at the Pluto liquefied natural gas plant near Karratha and disruptions due to a tropical cyclone off the Western Australian coast, Woodside is working on a deal to get more gas processed through the North West Shelf and Pluto LNG plants.The extent of the impact on costs still seems to have been underestimated by most analysts, given the consensus for net profit was $US480 million, according to Citigroup. Australia's Woodside Petroleum Ltd. sees oil and gas markets improving later this year after a dismal first-half hit by the COVID-19 pandemic, and is keenly looking to … The dividend was also lower than most anticipated, at US36¢, compared to the consensus estimate US51¢.Chief executive Peter Coleman said Woodside is anticipating a strong second half and is on track to achieve its target for production of about 100 million barrels of oil equivalent in 2020. Find the investing style that's right for you. This was down US$1 billion on the prior year and to me feels ideal. Each barrel of oil equivalent Woodside extracted in 2018 cost around US$5.1 to produce with a break-even cash cost of sale of just US$10.4 per barrel.Together these three points give me a sense that Woodside has upside potential if the price of oil rises and limited risk on the downside if it falls further, supported by a conservative balance sheet and the lower Aussie dollar.They also set a useful starting point when thinking about investing in any commodity business before buying shares.When investing expert Scott Phillips has a stock tip, it can pay to listen.