April 16, 2014, 8:26 p.m. EDT
Woodside output rises, but no Leviathan deal yet
NEW
By Ross Kelly
SYDNEY--Woodside Petroleum Ltd. (WPL.AU), reporting a 16% rise in first-quarter production, said it continues to be frustrated in its efforts to finalize a deal to buy part of a giant natural gas discovery offshore Israel.
Woodside said it remains in talks with the Israeli government and partners in the Leviathan gas field, which include Noble Energy Inc. and Delek Drilling LP, after a March 27 deadline to seal a revised deal slipped.
The negotiations have already dragged on for more than a year, adding to investor worries about Woodside's ability to continue growing in its oil and natural gas production in the longer term. Last year, Woodside and partners including Royal Dutch Shell PLC (RDSB) delayed a decision on the multibillion-dollar Browse gas-export project offshore Western Australia state by at least two years.
In February, Woodside agreed to reduce its planned stake in Leviathan to 25% from an earlier plan struck in late 2012 to take a 30% stake.
"Discussions continue with the parties and the Israeli government with a view to resolving the remaining issues and executing definitive agreements," Woodside said.
Talks were drawn out last year as the Israeli government drew up a policy for gas exports. It finally approved the export of up to 40% of Leviathan's reserves in the middle of last year, with the rest earmarked for domestic supply.
The update on Leviathan came as Woodside--Australia's second-biggest oil company by production behind BHP Billiton Ltd. (BHP.AU) -- said revenue for the three months through March rose to US$1.68 billion. The increase was driven largely by its Vincent oil project offshore Western Australia coming back online after repairs last year.
Also on Thursday, Australian oil company Santos Ltd. (STO.AU) said its first-quarter revenue rose by 28% to 913 million Australian dollars (US$856 million), despite lower production, due to higher oil sales.
Write to Ross Kelly at ross.kelly@wsj.com
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