PERTH, Australia–(BUSINESS WIRE)–Woodside Energy Group (ASX: WDS) (NYSE: WDS) (LSE: WDS):
HALF-YEAR REPORT FOR PERIOD ENDED 30 JUNE 2024
High-quality business delivering strong dividends
Financial highlights
Net profit after tax of $1,937 million.
Underlying net profit after tax of $1,632 million.1
Operating cash flow of $2,393 million and positive free cash flow of $740 million. 1
Australian tax and royalty payments of A$2,682 million.
Liquidity of $8,479 million. 1 ,2
Determined a fully franked interim dividend of 69 US cents per share (cps), at the top end of the payout range and representing a half-year annualised dividend yield of 7.3%.3
Operational highlights
Delivered H1 production of 89.3 MMboe (491 Mboe/d). Full year production guidance remains unchanged.
Reduced unit production cost to $8.3/boe ($8.8/boe in H1 2023) despite the inflationary environment.
Achieved first oil at the Sangomar Project in June 2024. Subsequent to the period the project achieved nameplate capacity with gross production rates of 100,000 barrels per day.
Continued to embed the Field Leadership Program to strengthen our learning culture and improve safety outcomes.
Took a final investment decision (FID) on Lambert West, Xena-3 and Atlantis Drill Centre 1 Expansion (DC1X).
Business highlights
The Scarborough Energy Project was 67% complete at the end of H1 2024, with first LNG cargo expected in 2026.4
Signed an agreement with JERA for the sale of a 15.1% non-operated participating interest in the Scarborough Joint Venture (SJV). Estimated total consideration for the sale is $1,400 million.5
Completed the sale of a 10% non-operated participating interest in the SJV to LNG Japan for $910 million.6
Signed sale and purchase agreements (SPAs) with Korea Gas Corporation (KOGAS) and CPC Corporation, Taiwan (CPC) for the long-term supply of LNG to Korea and Taiwan respectively.
Continued to progress the Trion Project engineering, procurement and contracting.
Subsequent to the period, Woodside entered into two transactions that have significant cash generation potential to underpin long-term shareholder value.7 These are agreements to acquire:
Tellurian, including its US Gulf Coast Driftwood LNG development opportunity, for an all-cash payment of approximately $900 million; and
OCI’s Clean Ammonia Project in Beaumont, Texas for an all-cash consideration of approximately $2,350 million.
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1 Non-IFRS measure. Refer to pages 50 – 52 for further information.
2 Woodside cancelled $1,550 million of undrawn facilities in July 2024. This cancellation has the effect of reducing our liquidity by $1,550 million.
3 Calculated based on Woodside’s closing share price on 28 June 2024 of A$28.21 and a US$:A$ exchange rate of 0.67.
4 The completion % excludes the Pluto Train 1 modifications project.
5 The SPA is with JERA Scarborough Pty Ltd which is a wholly owned subsidiary of JERA Co., Inc. Subject to completion of the transaction, targeted for the second half of 2024. See “Woodside to sell 15.1% Scarborough interest to JERA”, announced 23 February 2024.
6 LJ Scarborough Pty Ltd (LNG Japan) is a jointly owned subsidiary of LNG Japan Corporation (which is a 50:50 joint venture between Sumitomo Corporation and Sojitz Corporation) and Japan Organization for Metals and Energy Security (JOGMEC). JOGMEC has a 49.9% interest in LJ Scarborough Pty Ltd. See “Woodside completes sale of 10% Scarborough interest”, announced 26 March 2024.
7 See “Woodside to acquire Tellurian and Driftwood LNG”, announced 22 July 2024 and “Woodside to acquire OCI’s Clean Ammonia Project”, announced 5 August 2024.
Summary
Woodside reported net profit after tax (NPAT) for the half-year of $1,937 million. Production was 89.3 MMboe (491 Mboe/d) and underlying NPAT was $1,632 million, down 14% on the corresponding period in 2023.
The directors have determined a fully franked interim dividend of 69 US cents per share (cps), representing an approximately 80% payout ratio of underlying NPAT.
Woodside Energy CEO Meg O’Neill said the results demonstrate how Woodside’s high performing base business continues to deliver strong dividends to shareholders while laying a foundation for future success.
“We maintained high reliability of 97.9% at our operated LNG assets and continue to manage costs effectively in an inflationary environment.
“In the first half of 2024 we delivered on a significant element of our strategy, achieving first production from Sangomar, Senegal’s first offshore oil project. Production ramp-up at Sangomar has progressed well and subsequent to the period, peak gross production rate of 100,000 barrels per day was achieved, demonstrating Woodside’s world-class project execution capability. Sangomar will deliver enduring value for Woodside shareholders and benefits for our partner Petrosen and the people of Senegal.
“We also made good progress on the Scarborough Energy Project in Western Australia, which is more than two-thirds complete and on track for first LNG cargo in 2026. Work on the Scarborough floating production unit passed a major milestone with structural completion of the topsides. Pluto Train 2 site works continued with 29 of the 51 modules delivered and 25 modules set in position.
“We completed the sale of a 10% non-operating participating interest in the Scarborough Joint Venture (SJV) to LJ Scarborough Pty Ltd (LNG Japan) for $910 million and executed a binding sale and purchase agreement for the sale of a further 15.1% non-operating participating interest in the SJV to JERA.
“Long-term LNG supply agreements were also reached with Korea Gas Corporation and with CPC Corporation, Taiwan, underlining the importance of LNG in regional energy security.
“Our agreement last month to acquire Tellurian, including its US Gulf Coast Driftwood LNG development further strengthens our LNG portfolio, complementing our existing Pacific basin position with additional exposure in the Atlantic basin. Woodside expects to leverage its global LNG expertise to unlock this development and enable long-term cashflow generation.
“In our new energy business, all primary environmental approvals have been secured for the Hydrogen Refueller @H2Perth, which is targeting supplying industrial customers in Western Australia in 2025. We have also progressed several carbon capture and storage (CCS) opportunities, including the signing of a memorandum of understanding between the Angel CCS Joint Venture and Yara Pilbara Fertilisers to study the use of the technology.
“We continue to deliver on our strategy to thrive through the energy transition whilst maintaining our disciplined capital management. Our agreement to acquire OCI’s Clean Ammonia project in Texas positions Woodside to be an early mover in the emerging lower carbon ammonia industry and makes a significant contribution to delivering our Scope 3 targets.
“Above all, we are committed to continually improving safety and have focused on strengthening our safety culture, simplifying our processes and improving our systems.
“As we officially mark 70 years as an Australian company, I am proud that Woodside is facing the future with the same spirit of innovation and determination that our founders showed.”
Financial summary
Key metrics
H1
2024
H1
2023
Change
%
Operating revenue
$ million
5,988
7,400
(19%)
EBITDA excluding impairment8
$ million
4,371
4,888
(11%)
EBIT8
$ million
2,362
2,791
(15%)
Net profit after tax (NPAT)9,10
$ million
1,937
1,740
11%
Underlying NPAT8
$ million
1,632
1,896
(14%)
Net cash from operating activities11
$ million
2,393
2,951
(19%)
Capital expenditure8,12
$ million
2,365
2,769
(15%)
Exploration expenditure8,13
$ million
112
187
(40%)
Free cash flow8,11,14
$ million
740
314
136%
Dividends distributed
$ million
1,310
1,519
(14%)
Interim dividend declared
US cps
69
80
(14%)
Key ratios
Earnings
US cps
102.2
91.7
11%
Gearing8
%
13.3
8.2
5.1%
Production volumes15,16
Gas
MMboe
60.9
63.5
(4%)
Liquids
MMboe
28.4
27.8
2%
Total
MMboe
89.3
91.3
(2%)
Production volumes per day15
Gas
MMscf/d
1,907
1,999
(5%)
Liquids
Mbbl/d
156
154
1%
Total
Mboe/d
491
504
(3%)
Sales volumes16
Gas
MMboe
65.0
72.0
(10%)
Liquids
MMboe
28.9
26.8
8%
Total
MMboe
93.9
98.8
(5%)
Sales volumes per day
Gas
MMscf/d
2,035
2,268
(10%)
Liquids
Mbbl/d
159
148
7%
Total
Mboe/d
516
546
(5%)
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8 This is an alternative performance measure (APM) which is a non-IFRS measure that is unaudited. Woodside believes this non-IFRS measure provides useful performance information, but it should not be considered as an indication of, or as a substitute for, statutory measures as an indicator of actual operating performance (such as net profit after tax or net cash from operating activities) or any other measure of financial performance or position presented in accordance with IFRS. Refer to Alternative Performance Measures on pages 50 – 52 for a reconciliation for these measures to Woodside’s financial statements and Non-IFRS Measures on page 57 for more information about non-IFRS measures.
9 Net profit after tax attributable to equity holders of the parent.
10 Subsequent to achieving first oil on the Sangomar project in June 2024, the Group has recognised a net deferred tax asset of $305 million. The expected sale of Woodside’s 15.1% share in the Scarborough Joint Venture resulted in the recognition of a net tax benefit of $91 million. These events have resulted in a reduction of the global effective income tax rate from 25.6% to 6.9%. In the prior period, as a result of the final investment decision to develop the Trion resource, the Group recognised deferred tax assets of $319 million, resulting in a reduction of the global effective income tax rate from 29.6% to 13.9%.
11 Purchases of shares relating to employee share plans, which were previously classified within cash flows used in operating activities, has been classified within cash flows used in financing activities for the half-year ended 2024. The 2023 comparatives have been reclassified to be presented on the same basis.
12 Capital additions on oil and gas properties, evaluation capitalised and other corporate spend. Excludes exploration capitalised and the effect of Global Infrastructure Partners’ (GIP) additional contribution to Pluto Train 2. The H1 2023 capital expenditure has been restated to include other corporate spend.
13 Exploration and evaluation expenditure less amortisation costs and prior year exploration expense written off.
14 Cash flow from operating activities less cash flow from investing activities.
15 Includes production of 88.7 MMboe from Woodside reserves and 0.6 MMboe primarily from feed gas purchased from Pluto non-operating participants processed through the Pluto-KGP Interconnector.
16 The conversion factors used throughout this report are set out on page 55, unless otherwise stated. Sales volumes differ from production volumes primarily due to the timing of liftings and the exclusion of third-party purchased volumes.
Appendix 4D
Results for announcement to the market
More information is available on page 44
US$ million
Revenue from ordinary activities
Decreased
19%17
to
5,988
Profit from ordinary activities after tax attributable to members
Increased
11%17
to
1,937
Net profit for the period attributable to members
Increased
11%17
to
1,937
Interim dividend – fully franked
69 US cps H1 2024
Record date for determining entitlements to the dividend
6 September 2024
Net profit after tax reconciliation
The following table summarises the variance between the H1 2023 and H1 2024 results for the contribution of each line item to NPAT.
US$m
Primary reasons for variance
2023 H1 reported NPAT
1,740
Revenue from sale of hydrocarbons
Price
(1,077)
Lower average realised prices.
Volume
(364)
Fewer third-party LNG trades classified as revenue and natural field decline.
Other operating revenue
29
Increase in processing and services revenue.
Cost of sales
600
Lower royalties, trading costs and depreciation expense in H1 2024 and Pluto turnaround activities in the prior period.
Other income
181
Gain on SJV sell-down to LNG Japan.
Other expenses
134
Lower fair value losses on embedded derivatives.
Impairment losses
68
Pre-tax impairment of Pyrenees recognised in prior period.
Income tax and PRRT expense
724
Recognition of the Trion deferred tax asset (DTA) offset by derecognition of the Pluto PRRT DTA, both not present in the current period.
H1 2024 includes the first-time recognition of a net DTA for the Sangomar Project.
Other
(98)
2024 H1 reported NPAT
1,937
2024 H1 NPAT adjustments
(305)
Adjustment for the recognition of the Sangomar DTA.
2024 H1 underlying NPAT
1,632
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17 Comparisons are to half-year ended 30 June 2023.
Capital management
Woodside’s capital management framework provides us with the flexibility to optimise value and shareholder returns delivered from our portfolio.
Interim dividend and dividend reinvestment plan
A 2024 fully franked interim dividend of 69 US cps has been determined, representing a half-year annualised dividend yield of 7.3%.18 The total amount of the interim dividend payment is $1,310 million which represents approximately 80% of underlying NPAT for the first half of 2024.19
The dividend reinvestment plan (DRP) remains suspended.
Liquidity and Balance sheet
In H1 2024, Woodside generated $2,393 million of cash flow from operating activities and delivered positive free cash flow of $740 million.19,20
Woodside increased its standby debt facilities from $6,050 million to $6,500 million. Liquidity at the end of the period was $8,479 million and Woodside’s drawn debt at the end of the period was $5,850 million.
Woodside entered into a $1,000 million 10-year loan with the Japan Bank for International Cooperation (JBIC) to support the Scarborough Energy Project which was available for drawdown from the end of June 2024. In addition, Woodside entered into a $450 million 10-year loan from commercial banks for general corporate purposes. Subsequent to the period, $1,550 million of undrawn facilities were cancelled. This cancellation has the effect of reducing our liquidity by $1,550 million. As part of active debt management, Woodside continues to review options to further access the debt market.
Net debt at the end of the period increased 67% from H1 2023 to $5,388 million, in line with planned capital expenditure.19 Woodside’s gearing at the end of the first half was 13.3%, within our target range of 10-20%.19
As a result of the recent announcements to acquire Tellurian, including its Driftwood LNG development, and OCI’s Clean Ammonia Project, Woodside expects its gearing to be above the top end of the target range for a period of time as the balance sheet is managed through the investment cycle.
Woodside’s commitment to an investment grade credit rating remains unchanged and supports our aim of providing sustainable returns to shareholders and investing in future growth opportunities, in accordance with the capital allocation framework.
Commodity price risk management
Woodside hedges to protect the balance sheet against downside commodity price risk, particularly during periods of high capital expenditure.
As at 30 June 2024, Woodside has placed oil price hedges for:
approximately 29.3 MMboe of 2024 production at an average price of $75.6 per barrel, of which approximately 14.4 MMboe has been delivered; and
a further 15 MMboe of 2025 production at an average price of approximately $81.2 per barrel.
Woodside has also placed a number of hedges for Corpus Christi LNG volumes to protect against downside commodity price risk. These hedges are Henry Hub and Title Transfer Facility (TTF) commodity swaps. Approximately 70% of Corpus Christi volumes for the remainder of 2024, 48% of 2025 and 9% of 2026 volumes have reduced pricing risk as a result of hedging activities.
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18 Calculated based on Woodside’s closing share price on 28 June 2024 of A$28.21 and a US$:A$ exchange rate of 0.67.
19 These are non-IFRS measures. Refer to Alternative Performance Measures for a reconciliation for these measures to Woodside’s financial statements on pages 50 – 52 and Non-IFRS Measures on page 57 for more information about non-IFRS measures.
20 Cash flow from operating activities less cash flow from investing activities.
Australian operations
Pluto LNG
Pluto LNG is a gas processing facility in the Pilbara region of Western Australia, comprising an offshore platform and one onshore LNG processing train.
Woodside’s share of production in H1 2024 was 26.9 MMboe. This was a 15% increase compared with H1 2023 which was impacted by planned turnaround activities, partially offset by reduced reliability following an offshore trip and a separate electrical fault onshore in H1 2024.
Woodside took FID for the Xena-3 well to support ongoing production from the project and started-up the produced water handling unit at the Pluto A platform.
Drilling of the PLA-08 production well commenced in June 2024.
Approvals were also granted to extend Pluto gas flows through the Pluto-Karratha Gas Plant Interconnector (Interconnector) from April 2024 to approximately December 2025, enabling continued acceleration of LNG and domestic gas production. The Interconnector generated incremental revenue of $315 million in H1 2024.
Woodside is operator and holds a 90% participating interest.
Woodside Solar
Woodside is progressing a potential opportunity to reduce gross Scope 1 greenhouse gas emissions at Pluto LNG by utilising solar energy from the proposed Woodside Solar Project.
In H1 2024, Woodside continued to work closely with the Western Australian Government to progress its plans to develop common user transmission infrastructure that will be required to transmit renewable energy from the proposed solar facility to Pluto LNG via the North-West Interconnected System.
Woodside Solar FID and first solar energy import timing are subject to securing access to this new power transmission infrastructure and finalising associated commercial agreements.
North West Shelf Project
The North West Shelf Project (NWS) consists of three offshore platforms and the onshore Karratha Gas Plant (KGP) which includes five onshore LNG processing trains and two domestic gas trains.
Woodside’s share of production in H1 2024 was 19.6 MMboe. This was a 14% decrease compared with H1 2023 due to planned offshore maintenance and natural field decline. In H1 2024, 6.0 MMboe of Pluto gas was processed at KGP through the Interconnector.
Woodside continues to look for opportunities to harness value from our late-life assets. In H1 2024, the NWS Joint Venture participants took FID on the Lambert West Project which will support ongoing production from NWS. Discussions continue between the NWS Joint Venture participants and other resource owners for the processing of third-party gas to utilise ullage at KGP. Processing of Waitsia gas continued and is expected to ramp up when the Waitsia Stage 2 facility commences production, which is expected in late 2024.
As the NWS celebrates 40 years of operations, the project is entering a period of production decline. KGP currently has processing ullage due to natural field decline and the current level of third-party gas processing demand. To manage both operating costs and emissions, NWS is preparing to take one LNG train offline between late 2024 and mid-2025.
State and Commonwealth regulatory approval processes are progressing for the North West Shelf Project Extension, which will support long-term operations and processing of future third-party gas resources at KGP.
Woodside is operator and holds a 33.33% participating interest.
Wheatstone and Julimar-Brunello
Wheatstone is an LNG processing facility near Onslow, Western Australia, comprising an offshore production platform and two onshore LNG production trains. It processes gas from several offshore gas fields including Julimar and Brunello.
Woodside’s share of Wheatstone production in H1 2024 was 5.8 MMboe. This was a 12% decrease compared with H1 2023, due to unplanned outages impacting the Julimar subsea production system and the Wheatstone facility respectively.
Woodside is operator and holds a 65% participating interest in the Julimar-Brunello fields.
Woodside holds a 13% non-operating participating interest in the Wheatstone Project.
Bass Strait
Bass Strait is located in the south east of Australia and produces oil and gas through a network of offshore platforms, pipelines and onshore processing facilities. The Bass Strait assets include the Gippsland Basin Joint Venture (GBJV) and the Kipper Unit Joint Venture (KUJV).
Woodside’s share of production from Bass Strait was 8.5 MMboe in H1 2024, a 22% decrease from H1 2023 predominantly due to lower domestic gas market demand, offshore maintenance, and reduced crude oil production due to field decline. All of Woodside’s share of the gas produced from Bass Strait is supplied into the eastern Australian domestic gas market.
The GBJV is optimising facilities through the Gippsland Asset Streamlining project as production rates from the Bass Strait decline. As planned, production from the West Kingfish and Halibut oil platforms ceased in March and April 2024 respectively.
The Kipper Compression Project offshore modules have been successfully installed. The project is planning for startup in Q3 2024, to enable continued supply of gas to the domestic market.
Woodside holds a 50% non-operating participating interest in the GBJV and a 32.5% non-operating participating interest in the KUJV.
Other Australian oil and gas assets
Woodside operates three FPSO facilities off the north west coast of Western Australia. These are the Okha FPSO (Woodside participating interest: 50%), Ngujima-Yin FPSO (Woodside participating interest: 60%) and Pyrenees FPSO (Woodside participating interest: 40% in WA-43-L and 71.4% in WA-42-L).
Woodside’s share of production from the FPSO assets was 3.0 MMboe in H1 2024. This was a 3% decrease from H1 2023 primarily due to the planned five-yearly Pyrenees FPSO maintenance turnaround and the Pyrenees shut-in following a produced-water leak identified subsea at the facility. Production at Pyrenees recommenced in June 2024 and the produced-water leak has been rectified.
Macedon (Woodside participating interest: 71.4%), also operated by Woodside, is a gas project located near Onslow, Western Australia which produces pipeline gas for the Western Australian domestic gas market.
Woodside’s share of production from Macedon was 3.9 MMboe, down from 4.1 MMboe in H1 2023. The Macedon facility delivered approximately 11% of the Western Australian domestic gas market supply in H1 2024.
International operations
Sangomar
The Sangomar Field Development Phase 1 is a deepwater project including a stand-alone FPSO facility moored approximately 100 kilometres offshore Senegal and subsea infrastructure that is designed to allow subsequent development phases.
First oil was achieved in June 2024, marking the delivery of Senegal’s first offshore oil project. Woodside’s share of production from Sangomar in H1 2024 was 0.5 MMboe. Subsequent to the period, nine production wells have come online, and the project successfully achieved peak gross rate of 100,000 barrels per day. Commissioning activities are expected to continue through 2024.
Sales of the initial Sangomar crude cargoes have been finalised, with interest received from European and Asian refiners. Subsequent to the period, the first two cargoes were loaded and delivered to Europe and a third cargo was loaded for delivery to Asia.
Contacts
INVESTORS
Marcela Louzada
M: +61 456 994 243
E: investor@woodside.com
MEDIA
Dan Pagoda (Australia)
M: +61 482 675 731
E: dan.pagoda@woodside.com
Rob Young (United States)
M: +1 281 790 2805
E: robert.young@woodside.com
