Value Investor: Woodside plays the long game

Woodside's decision to terminate the Leviathan joint venture reflects management's prudence, but also raises questions about the group's near-term growth prospects.

Woodside Petroleum has been returning capital to shareholders and attracting yield investors. However, the current share price (north of $40) cannot be justified on the future outlook for Woodside, given its lack of near-term growth opportunities.

Last week, Woodside announced the termination of the Leviathan joint venture project due to the inability to reach a commercially acceptable outcome during negotiations. Funds earmarked for Leviathan totalled $1 billion, leading to expectations of another capital return to investors.

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