Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Woodside Petroleum — H1 2015 Earnings Presentation
33 slides from Woodside Energy's earnings presentation, Aug 19, 2015
Slide 1: 2015 half-year results briefing
2015 half-year results briefing Peter Coleman | Chief Executive Officer and Managing Director 19 August 2015
Slide 2: Disclaimer and important notice
Disclaimer and important notice This presentation contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable as at the date of this presentation but they may be affecte
Slide 3: Key achievements
Key achievements Delivered on our operating and investment commitments Entered FEED for Browse, FID targeted 2H 2016, accelerated Greater Enfield Increased 2P reserves (19.5%, 260.9 MMboe), 2C contingent resources (151%, 2,632 MMboe) by acquisition Discovered additional 2C contingent resourc
Slide 4: Financial headlines
Financial headlines US$ million unless otherwise stated Operating revenue 2,556 Reported Net Profit after Tax 679 Reported earnings US83 cps1 Interim dividend US66 cps1 Operating cash flow 1,083 Net debt $3.8 billion Gearing 20% 1. cps – cents per share 2015 half-year results briefing 4
Slide 5: Business environment – 1H 2015
Business environment – 1H 2015 120 Brent oil price Oil market likely to remain oversupplied through 2016 2015 world oil demand growth 1.4 mbd; double 2014 growth 100 Oil market rebalancing gradually Spot prices for LNG to Asia have softened 80 China’s economy continues to slow; less energy
Slide 6: Safety and environment
Safety and environment Unrelenting focus on achieving top-quartile performance 5 Total Recordable Injury Rate Flare gas intensity Process Safety Events 16 TRIR2 per million hours worked 4 14 12 3 10 Events t/kt 8 2 6 1 4 2 0 0 0 0 0 0 2012 2013 2014 1H 2015 2012 2013 1H 2014 1H 2015 2012 2013 2014 1
Slide 7: Financial management
Financial management Lawrie Tremaine | Chief Financial Officer
Slide 8: Reported profit - 1H 2014 vs. 1H 2015
Reported profit - 1H 2014 vs. 1H 2015 First half reported profit of $679 million down 39% on 1H 2014 1,105 910 679 287 US$ million 182 150 163 2 1H 2014 NPAT Sales revenue - Sales revenue - Net trading margin Net cost reductions PRRT Income tax 1H 2015 NPAT Price/FX/other Volume expense 2015 half-ye
Slide 9: Competitive financial performance
Competitive financial performance Peer leading earnings per barrel for 1H 2015 1H 2015 1H 2015 Earnings per barrel1 Operating cash flow per barrel1 30 20 25 15 20 10 15 5 10 US$ US$ - 5 (5) - (10) (5) (15) (10) (15) (20) (20) (100) Peers, reported as at 17 August 2015 Woodside 1. Comparison against
Slide 10: Production
Production First half production of 42.0 MMboe down 10% from 1H 2014 60 2015 guidance unchanged, 86-94 MMboe 1.8 0.6 50 46.5 2.9 2.5 Pluto turnaround ten days, 30% ahead 1.5 42.0 of schedule 40 Continued reliability improvement MMboe 30 Adverse cyclone impacts 20 11% 51% 10 0 42.0 MMboe 38% NW
Slide 11: Product pricing
Product pricing US$/boe % US$m Revenue 1H 2015 1H 2014 Variance Products impact NWS LNG 48 77 (38%) (310) Pluto price change reflects Pluto LNG 67 70 (4%) (45) Pipeline natural gas 23 31 (26%) (27) full half impact of price Condensate 53 108 (51%) (206) review LPG 56 108 (48%) (18) LNG pricing
Slide 12: Unit production costs
Unit production costs Success in delivering cost reduction Gas production costs Pluto Oil production costs 250 turnaround 20.00 164 210 204 210 18.00 153 143 139 200 16.00 48 14.00 150 138 12.00 162 10.00 100 8.00 US$m 5.6 5.8 US$/boe 5.2 5.0 US$/boe 6.00 33.5 US$m 50 4.00 25.2 24.6 19.9 4.2 2.00 0
Slide 13: Productivity program is delivering
Productivity program is delivering External spend optimised Volume maximised Target: 10 to 20% reduction in external spend Target: 3 to 5% uplift in volumes from existing assets Savings 2014 2015E Improved plant reliability and reduced turnaround times resulted in 4.6% improvement in 2014 Opex $13
Slide 14: Investment expenditure
Investment expenditure 4,000 Pluto Well developments ~$200m, Xena development costs ~$40m and sustaining capex ~$20m 3,000 NWS US$m Greater Western Flank and Persephone ~190 ~$100m, Karratha Life Extension ~$50m and 2,000 3,831 3,764 sustaining capex ~$30m ~990 Acquired assets Purchase price $
Slide 15: Liquidity
Liquidity Debt maturity profile at 31 January 2015 3,500 3,000 $3.75 billion refinanced via bond and bank markets 2,500 in 2015 2,000 US$m 1,500 Continued strong debt market support 1,000 $3.2 billion in cash and undrawn facilities as at 30 500 June 2015 0 2015 2016 2017 2018 2019 2020 2021-25
Slide 16: Dividend
Dividend First half US66 cents per share fully franked interim dividend 111 Interim dividend (US cps) 83 Represents an 80% payout ratio 65 66 55 50 1H 2010 1H 2011 1H 2012 1H 2013 1H 2014 1H 2015 Interim dividend 2015 half-year results briefing 16
Slide 17: Strategy update
Strategy update Peter Coleman | Chief Executive Officer and Managing Director
Slide 18: Browse FLNG Development
Browse FLNG Development Browse FLNG Development entered FEED in June FID targeted for 2H 2016 Activities are ongoing to finalise technical definition Pursuing cost reductions Progressing regulatory approvals Image courtesy of Shell Browse FLNG FEED signing ceremony 2014 2015 2016 Approved
Slide 19: Wheatstone LNG
Wheatstone LNG Project progressing to plan Julimar Project1 Julimar Project1: Wheatstone LNG Project2 Julimar 65% complete at 31 July Brunello fields Wheatstone WPL 65% Iago fields Targeting ready for start up 2H 2016 WPL 0% 20% Gas supply5 80% Gas supply Wheatstone LNG Project2: Over 65%3 com
Slide 20: Kitimat LNG
Kitimat LNG Appraising the Liard resource Key focus areas to progress the project: Appraisal drilling of the Liard Basin Cost competitive LNG facility First Nations support for upstream, Pacific Trail Pipeline route, LNG plant and export route A competitive and stable fiscal framework Secu
Slide 21: Development pipeline
Development pipeline Development projects are progressing to plan 2015 2016 2017 2018 2019 2020 2021 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H Browse NWS GWF 1 Persephone GWF 2 Lambert Deep Pluto - Xena Greater Enfield Wheatstone Wheatstone LNG Julimar Kitimat Concept Select Concept Definition & FEE
Slide 22: Global exploration
Global exploration Exploration drilling success in 1H 2015 Discovered additional 2C Contingent resource of 68 MMboe (net) for Pluto with the Pyxis-1 exploration well Cameroon: currently drilling Cheetah-1 well Republic of Korea: preparations underway to drill Hongge-1 well in Q4 Myanmar: pre
Slide 23: Global exploration pipeline
Global exploration pipeline Drilling and seismic activities demonstrate strategy execution 2015 2016 Size Drilling1 Q3 Q4 Q1 Q2 Q3 Q4 Volume2 Exmouth sub-basin Malaguti Dry hole Swell Large Beagle Basin Skippy Rocks Medium TBA Medium Cameroon Cheetah Large Myanmar Shwe Yee Htun Large Tha Lim Large K
Slide 24: Priorities 2H 2015 and beyond
Priorities 2H 2015 and beyond Unrelenting focus on safety performance and operational excellence Drive down Browse costs to enable FID, target 2H 2016 Deliver Julimar Project 2H 2016 Execute Browse LNG sales agreements to enable FID Drill three high impact exploration wells in 2H 2015 Di
Slide 25: Financial annexure
Financial annexure woodside
Slide 26: Operating revenue
Operating revenue First half operating revenue of $2,556 million – down 28%, Brent oil price down 46% 5,000 114 120 111 109 108 100 Decreased revenue from: 4,000 Average Brent oil price (US$/bbl) Price impact: $865 million Operating revenue (US$m) 3,551 80 3,000 Volume impact: $150 million 2,857
Slide 27: Gross unit cash margins
Gross unit cash margins Weighted average unit cash margins trend 1H 2015 cash margins by business area 3 9 7 8 9 9 8 8 3 7 8 12 4 28 8 6 4 58 61 60 US$/boe US$/boe 55 50 42 41 32 31 1H 2011 1H 2012 1H 2013 1H 2014 1H 2015 NWS Gas NWS Oil Aus Oil Pluto Cash margins Production costs Other costs Cash m
Slide 28: Cash flow trend
Cash flow trend 1,500 500 US$m -500 Free cash flow Before asset acquisition -1,500 Operating cash flow -2,500 -3,500 1H 2012 1H 2013 1H 2014 1H 2015 Asset acquisition 2015 half-year results briefing 28
Slide 29: Capital management
Capital management Gearing within target range of 10% - 30% following acquisition of assets Net debt and gearing 6,000 30 25 Target gearing Net debt (US$m) range 20 % gearing 3,000 15 10 5 0 0 1H 2011 1H 2012 1H 2013 1H 2014 1H 2015 Net debt Gearing 2015 half-year results briefing 29
Slide 30: Segment performance
Segment performance NWS and Pluto contribute the majority of EBITDA and are robust to low prices Business Unit performance NWS1 Pluto Aus Oil Production volume (MMboe) 21.6 15.9 4.5 NWS and Pluto margins remain substantial even in Operating revenue ($million) 935 1,185 264 a low price environment
Slide 31: Consensus
Consensus 1H 2015 profit and dividend in line with consensus Analyst Woodside consensus Variance Reported NPAT $m 679 678 1 NPAT and dividend results consistent with market expectations Final dividend US cps 66 65 1 2015 half-year results briefing 31
Slide 32: Underlying NPAT reconciliation
Underlying NPAT reconciliation 1H 2015 1H 2014 Variance MMboe MMboe % Production volume 42.0 46.5 (9.7) Sales volume 43.4 44.7 (2.9) US$m US$m Variance % 1. EBITDAX = earnings before interest, tax, Sales revenue 2,305 3,354 (31.3) depreciation, amortisation, exploration and evaluation (includes non-
Slide 33: Notes on Petroleum Resource Estimates
Notes on Petroleum Resource Estimates Notes on Petroleum Resource Estimates: 1. Unless otherwise stated, all petroleum resource estimates in this presentation are quoted as at the balance date (i.e. 31 December) of Woodside’s most recent Annual Report released to ASX and available at www.woodside.co