Woodside faces lower production forecast -

Woodside Petroleum Ltd's record-breaking quarter has been overshadowed by ongoing problems at the Chinguetti oil field in Mauritania and a potential reduction in its 2006 production forecast.
Woodside, Australia's biggest independent oil and gas producer, posted record production for the third quarter of 19.1 million barrels of oil equivalent (Mmboe).
That was 27.7 per cent higher than the previous third quarter, when the company's output reached 14.9 Mmboe, and a 22.3 per cent improvement on the second quarter.
Revenue for the third quarter soared 35 per cent from the second quarter to a record $1.14 billion, which was also a 53.4 per cent increase on the previous third quarter.
Woodside attributed the rise to higher oil prices and increased production after the $1.5 billion Enfield project in Western Australia came online ahead of schedule.
But Woodside indicated it would struggle to achieve its 2006 production target of 72 Mmboe.
"The production for calendar year 2006 is still quite variable, however, the aforementioned items (such as Chinguetti) will make the 72 Mmboe target difficult to achieve," Woodside said.
In June, Woodside revised its initial target of 76 Mmboe down to 72 Mmboe.
The $1 billion Chinguetti project continues to underperform with third quarter production of 1.1 Mmboe down on the second quarter result of 1.5 Mmboe.
Woodside is reviewing the development plan of the whole field with drilling of new wells planned for this year and a seismic program expected to take place in early 2007.
"Data from both programmed activities will be used to update the development plan for the entire field," Woodside said.
Woodside also revealed it had voluntarily shut-in almost all of its unhedged Gulf of Mexico gas production due to low gas prices and the development of its Otway gas project off Victoria was facing delays.
Otway is now expected to come onstream by the end of the first quarter in 2007.
Woodside flagged in September a 21 per cent increase in capital costs for the phase five expansion of the North West Shelf in WA, taking costs to $2.4 billion.
"The revision was largely due to higher construction costs during a period of significant international construction market inflation," Woodside said.
UBS analyst Max Brewster said his major concern was Woodside's report that one of the Enfield Wells had cut water unexpectedly.
"We had been anticipating that Enfield would eventually get up to 100,000 barrels per day but they're probably going to be struggling to get much more than about 70,000 per day" Mr Brewster said.
"It's nothing like the Chinguetti problem, it probably means they'll have a lower rate going forward, but we don't really know at this stage."
Mr Brewster said it was likely Woodside would most fall short of its 2006 production target.
"When Woodside initially mentioned Chinguetti was not performing up to expectations the company mentioned 72 Mmboe as being the 2006 target, but it certainly looks a bit too hard for them now," Mr Brewster said
"We factored in lower production from Chinguetti but is still came in lower than what we expected for the quarter."
Woodside shares fell $1.05 or 2.6 per cent on Thursday to $39.05.