Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Investor Day (September 2024)
52 slides from Woodside Energy's investor day presentation, Sep 16, 2024
Slide 1: Global LNG Deep Dive
GLOBAL LNG DEEP DIVE 16 September 2024 www.woodside.com investor@woodside.com
Slide 2: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information plans, goals or expectations of Woodside are forward-looking statements. • This presentation has been prepared by Woodside Energy Group Ltd (“Woodside”).• Forward-looking statements in this presentation are not guidance, forecasts, guarantees o
Slide 3: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) Notes to petroleum resource estimates regulatory approvals will be obtained. Additional assumptions relevant to particular targets or other statements in this presentation may be set out in the relevant slides. Any such additional assumptions a
Slide 4: Agenda
Agenda 1 Woodside overview and business model 2 Macroeconomic LNG trends 3 Marketing strategy and insights 4 Financial overview 5 Close 4
Slide 5: Unique portfolio of global high quality LNG and deepwater oil assets
Unique portfolio of global high quality LNG and deepwater oil assets Western Australia LNG operating 1 Market capitalisation experience 326 Mboe/d ~$ East coast Australia 35 years 35 billion 47 Mboe/d Houston 2 3 Production LNG sales > Mboe/d 500 263 Mboe/d Gulf of Mexico 91 Mboe/d 1 Perth Global em
Slide 6: Compelling investment thesis
Compelling investment thesis High quality Operational Shareholder value Positioned for the portfolio excellence and returns energy transition Disciplined capital management Geographically advantaged to 35 years of operating experience in Delivering on emissions reduction 1 and clear capital allocati
Slide 7: Our strategy is to thrive through the energy transition
d e i f i s r e v i D t n e i l i s e R e l b a t Our strategy is to thrive through the energy transition We aim to thrive through the energy transition with a low cost, Three goals drive Woodside’s strategic direction lower carbon, profitable, resilient and diversified portfolio Provide energy thro
Slide 8: Building strong business foundations
Building strong business foundations 2023 | Took FID for the Trion development Executed additional merchant LNG offtake 2021 | Took FID for the Scarborough 2013 | Executed Energy Project first merchant LNG offtake contract Began establishing Karratha Gas Plant 2024 | Production 1989 | First LNG port
Slide 9: Delivering near term growth through large scale projects
Delivering near term growth through large scale projects Trion Sangomar Scarborough FPSO facility, located offshore Senegal 8 Mtpa LNG project capacity (100%) FPU facility, offshore Mexico, with oil plus domestic gas, located offshore production capacity of 100,000 First oil achieved in June 2024; a
Slide 10: A differentiated LNG business model
A differentiated LNG business model How Woodside adds value Portfolio construction considerations Operations ▪ Predominantly operated assets, with some non- ▪ Lower unit cost and high reliability across operated assets operated positions, to balance control and ▪ History of debottlenecking and opera
Slide 11: Geographic diversity and scale to leverage portfolio efficiencies
Geographic diversity and scale to leverage portfolio efficiencies Atlantic LNG Pacific LNG Stage / equity interest Stage / capacity (100%) Operated Operated NWS Project Producing 5.6 Mtpa Driftwood LNG Pre-FID 16.5 Mtpa (Phase 1 and 2) Pluto LNG Producing 4.4 Mtpa Driftwood LNG Scarborough Pre-FID 1
Slide 12: World class LNG operations
World class LNG operations Scarborough Energy Project North West Shelf Project Pluto LNG 1 Woodside equity 90% 74.9% (upstream) , 51% (downstream) 25-33.33% First LNG cargo 1989 2012 Targeting 2026 EBITDA margin ~83% (HY 2024) ~87% (HY 2024) n/a Gross capacity 5.0 Mtpa + 3.0 Mtpa (Pluto Train 1) 16.
Slide 13: Shaping an LNG business for the future
Shaping an LNG business for the future 1 Driftwood LNG Project Established position as a portfolio player ▪ High quality, scalable development option Increasing supply diversity through Scarborough ▪ Fully permitted for 27.6 Mtpa Energy Project and third-party offtake contracts 2 ▪ Cost competitive
Slide 14: Macroeconomic overview
MACROECONOMIC OVERVIEW Meg O’Neill Chief Executive Officer and Managing Director
Slide 15: Increasing GDP per capita expected to drive energy demand
Increasing GDP per capita expected to drive energy demand Energy consumption per capita expected to grow as global Expected population increase to ~10 billion by 2050 from ~8 3 1 living standards rise billion in 2023 , impacting forecast GDP per capita 2 GDP per capita (constant prices (2015), US$)
Slide 16: Growing need for energy as population and living standards increase
Growing need for energy as population and living standards increase As countries’ standards of living improve, energy use per capita Number of people lacking access to electricity remains high, 1 and total energy demand is expected to increase estimated ~685 million people in 2022 2 Energy consumpti
Slide 17: Clear benefits of LNG
Clear benefits of LNG Reliable Flexible Lower carbon 1 Globally mobile Proven and increasingly deep market Half the lifecycle emissions of coal Seasonally adaptable Firming power for grids with renewables Can help countries decarbonise Fits into existing gas networks Established supply chains with s
Slide 18: Opportunity for LNG to displace coal
Opportunity for LNG to displace coal 1 Global coal consumption and global LNG trade (exajoules) 180 Paris Agreement 160 Coal accounted for 25% of global primary 140 1 energy consumption in 2023 120 Kyoto Coal demand in emerging markets and Protocol 100 Asia Pacific developing economies was the bigge
Slide 19: LNG can help countries decarbonise
LNG can help countries decarbonise Case study: coal-to-gas switching was the largest driver of energy 2 related emissions reductions in the US in 2023 Coal remains a significant portion of energy mix US case study: change in CO emissions from electricity generation by driver in the 1 2 2023 total en
Slide 20: Strong LNG demand growth expected
Strong LNG demand growth expected 1 LNG demand by region (Mtpa) Demand drivers 700 >50% ▪ Customers’ decarbonisation goals 600 ▪ Energy security 500 ▪ Gas as firming power for renewables >60% 400 Pacific Basin Supply pressures 300 ▪ Regulatory environments 200 ▪ Project execution delays 100 Atlantic
Slide 21: Market appetite for LNG
Market appetite for LNG Europe Increased near-term LNG growth Japan, Korea, Taiwan Appetite for long-term contracts, recognising Value certainty of supply and complexity of renewable decarbonisation ramp-up Appetite for long-term oil indexed contracts and JKM LNG market remains exposure fragmented w
Slide 22: US supply and Asian demand expected to lead growth
US supply and Asian demand expected to lead growth Europe China US is flexible to supply Europe and Asia Japan US New LNG investment to be underpinned by demand growth in Qatar Asian markets India Latin Africa America Australia 1 1 Supply Demand 2024 2040 2024 2040 22 1. Wood Mackenzie LNG Tool (2Q2
Slide 23: New supply finds demand with resilient pricing over the longer term
New supply finds demand with resilient pricing over the longer term 2,3 Historical LNG Price ($US/MMbtu) and historical global LNG supply growth (Mtpa) 70 60 “looming glut could have far- reaching effects on gas pricing” IEA, November 2009 Global LNG supply growth is likely to be 50 “LNG glut will c
Slide 24: Contracting appetite signals confidence in demand
Contracting appetite signals confidence in demand Contracts signed by China and South/South-East Asia reinforces Increase in longer duration LNG contracts confidence in Asian demand 1 1 Global LNG contracts by duration (annual contract quantity, Mtpa) Global LNG contracts by destination (annual cont
Slide 25: Marketing
MARKETING Mark Abbotsford Executive Vice President and Chief Commercial Officer
Slide 26: Competitively advantaged marketing portfolio
Competitively advantaged marketing portfolio Advantaged global Portfolio marketing Deep customer Long shipping supply strategy relationships position Proximity to demand hubs Portfolio seller enables flexibility Dedicated global marketing teams Seven LNG carriers on long-term and optimisation charte
Slide 27: Woodside portfolio enables value capture from market volatility
Woodside portfolio enables value capture from market volatility Historical US Gulf Coast Netbacks from JKM, European Gas Marker and Brent ($US/MMbtu) 40 Periods where flexibility can capture optimisation value Diversification in the Atlantic and Pacific 30 Basins unlocks marketing optimisation and a
Slide 28: Price volatility: how value is captured
Price volatility: how value is captured Value driver opportunity examples (US$/MMbtu) 3 1 2 Utilise shipping length Optimise supply portfolio Exercise contract options Woodside’s global position means that we Divert uncommitted volumes from Maximise volumes to Europe Increase volumes delivered under
Slide 29: Shipping fleet enables value capture
Shipping fleet enables value capture Woodside’s fleet Fleet ensures safe, reliable and efficient Woodside Woodside delivery of LNG Donaldson Rogers Quality operators with modern design offers lower carbon intensity shipping Woodside Woodside Goode Four new committed builds to be delivered Chaney bet
Slide 30: Deep dive: practical example case study
Deep dive: practical example case study 1 2 3 Example supply Value capture enabled Optimisation opportunity to divert to Europe, taking 1 offtake contract by Woodside’s approach advantage of index and flexible contracts US Gulf Coast supply contract Advantaged with base delivery to Asia, global supp
Slide 31: Portfolio has high oil indexation with price diversity
Portfolio has high oil indexation with price diversity Produced 1 1 Produced LNG portfolio Produced total portfolio total portfolio composition Longer-term Near-term Near-term Longer-term 2 (2027+) (2023) (2024-2025) (2024-2025) (2027+) ~25- ~10% ~30- Gas hub: 30% 35% ~20% JKM, TTF Exposure leverage
Slide 32: Recent Woodside contracting reflects strong market demand
Recent Woodside contracting reflects strong market demand 1 2 3 4 JERA LNG Japan KOGAS CPC Taiwan Size: 0.5 Mtpa Size: 0.6 Mtpa Scarborough JV Scarborough JV 3 4 Tenure: 10.5 years Tenure: 10 years investment: 15.1% investment: 10% 1 Commencement: 2026 Option: +10 years 2 Commencement: 2024 Growing
Slide 33: Woodside's global marketing and trading business
Woodside’s global marketing and trading business ▪ Optimise LNG flows and logistics ▪ Add value, with transparency through separately reported segment ▪ Be recognised as a reliable LNG supplier ▪ Benefit from economies of scale of global portfolio ▪ Develop strong relationships Woodside’s global ▪ G
Slide 34: Financial strength
FINANCIAL STRENGTH Graham Tiver Executive Vice President and Chief Financial Officer
Slide 35: Disciplined capital management, long-term shareholder value
Disciplined capital management, long-term shareholder value Disciplined investment Consistent cost Actively managed decisions focus balance sheet Unit production costs down and cash Opportunities must have compelling strategic Active management of debt portfolio conversion up (H1 2024) rationale and
Slide 36: Disciplined capital allocation framework
Disciplined capital allocation framework OIL GAS NEW ENERGY OFFSHORE PIPELINE LNG DIVERSIFIED Generate high returns to fund New energy products and lower Leveraging infrastructure to monetise undeveloped diversified growth, focusing on carbon services to reduce customers’ FOCUS gas, including option
Slide 37: Capital management framework to optimise value and returns
Capital management framework to optimise value and returns Special dividends Dividend Safe, reliable Strong Investment policy Share buy-backs and low cost balance expenditure (minimum 50% operations sheet payout ratio) Future investment Excess cash Investment grade Maintain dividend based on NPAT ex
Slide 38: Strong earnings and balance sheet from diversified global portfolio
Strong earnings and balance sheet from diversified global portfolio H1 2024 H1 2023 Change $m Operating revenue 5,988 7,400 19% Strong half-year underlying NPAT 1 $m EBITDA 4,371 4,888 11% 1 $m EBIT 2,362 2,791 15% $8.3/boe unit production cost, reduced 6% in an inflationary environment $m NPAT 1,93
Slide 39: Well positioned balance sheet for capital investment and returns
Well positioned balance sheet for capital investment and returns Balance sheet Dividend distribution 1 Gearing of 13.3% at the lower end of target range Interim dividend of $1.3 billion, fully franked, representing a half-year 5 annualised dividend yield of 7.3% Strong liquidity supporting major cap
Slide 40: Distinctive investment differentiation
Distinctive investment differentiation 3 1 2 STRONG MARGIN HIGH DIVIDEND YIELD GAS WEIGHTED 1 2 3 EBITDA margin (%) Last 12 months yield % gas in portfolio 80% 15% 90% Dividend yield Buyback contribution 60% 10% 60% 40% 5% 30% 20% 0% 0% 0% Dataset: Woodside versus industry peers (peer set includes A
Slide 41: Close
CLOSE Meg O’Neill Chief Executive Officer and Managing Director
Slide 42: Woodside's Scope 1, 2 and 3 emissions reduction targets
Woodside’s Scope 1, 2 and 3 emissions reduction targets Net zero SCOPE 1 AND 2 15% 30% aspiration by 2050 or sooner by 2025 by 2030 Reduce our net equity greenhouse gas 1 Net equity emissions reduction targets emissions SCOPE 3 5 Mtpa CO -e 2 $5 billion Total abatement capacity of FID on Investing i
Slide 43: Long history of LNG expertise
Long history of LNG expertise Operational excellence Project track record Marketing capability Demonstrated capability in LNG plant Strong reputation as a reliable energy 35 years of LNG operations development supplier ~98% reliability across operated LNG 1 Long-term relationships with key facilitie
Slide 44: Compelling investment thesis
Compelling investment thesis High quality Operational Shareholder value Positioned for the portfolio excellence and returns energy transition Disciplined capital management Geographically advantaged to 35 years of operating experience in Delivering on emissions reduction 1 and clear capital allocati
Slide 45: Q&A
Q&A
Slide 46: Appendix
APPENDIX
Slide 47: Driftwood LNG: adds scalable Atlantic LNG exposure to portfolio
Driftwood LNG: adds scalable Atlantic LNG exposure to portfolio Attractive entry into a scalable, fully permitted, 27.6 Mtpa US LNG development option Providing with a cost-competitive phased development plan energy Pathway to material complementary presence in the Atlantic Basin, enabling value and
Slide 48: OCI: acquiring one of the world's first lower carbon ammonia projects
OCI: acquiring one of the world’s first lower carbon ammonia projects Providing 1.1 Mtpa project under construction; with cost, schedule and performance guarantees, 1,2,3,4 energy targeting production of first ammonia from 2025 and lower carbon ammonia from 2026 Exceeds Woodside’s capital allocation
Slide 49: OCI acquisition: building exposure to a growing ammonia market
OCI acquisition: building exposure to a growing ammonia market 1 Global ammonia demand (million tonnes per annum) Existing global market of ~200 Mtpa traded on a blend of 500 spot and medium-term contracts 100% Hydrogen carrier 400 Lower carbon ammonia expected to exceed 250 Mtpa by Marine fuel 2050
Slide 50: Glossary
Glossary FEED Front-end engineering design FID Final investment decision $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars FPSO Floating production storage and offloading A$, AUD Australian dollar FPU Floating production unit Woodside uses this term to describe an
Slide 51: Glossary
Glossary Electricity indirect GHG emissions. Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or Woodside uses this term to describe technologies, such as CCUS or offsets, that m
Slide 52: Head Office: Woodside Energy Group Ltd
Head Office: Woodside Energy Group Ltd Mia Yellagonga 11 Mount Street Perth WA 6000 Postal Address: GPO Box D188 Perth WA 6840 Australia T: +61 8 9348 4000 F: +61 8 9214 2777 E: companyinfo@woodside.com Woodside Energy Group Ltd ABN 55 004 898 962 woodside.com
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