Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — H1 2024 Earnings Presentation
43 slides from Woodside Energy's earnings presentation, Aug 27, 2024
Slide 1: Half-Year Results Briefing 2024
HALF-YEAR RESULTS BRIEFING 2024 High-quality business delivering strong dividends 27 August 2024 www.woodside.com investor@woodside.com
Slide 2: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information completion and execution of Woodside’s projects, expectations regarding future capital expenditures, the payment of • This presentation has been prepared by Woodside Energy Group Ltd (“Woodside”). future dividends and the amount thereof, future
Slide 3: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) • All forward-looking statements contained in this presentation reflect Woodside’s views held as at the date of this Climate strategy and emissions data presentation and, except as required by applicable law, Woodside does not intend to, undert
Slide 4: High-performing business delivering long-term shareholder value
High-performing business delivering long-term shareholder value Driving value through world-class operating performance and disciplined cost management, unit production cost reduced 6% despite inflationary environment Providing energy Delivered Sangomar first oil, nameplate capacity achieved; Scarbo
Slide 5: Strong operational performance and financial outcomes
Strong operational performance and financial outcomes OPERATIONAL PERFORMANCE1 FINANCIAL OUTCOMES1 PRODUCTION VOLUME UNIT PRODUCTION COST NET PROFIT AFTER TAX (NPAT) EARNINGS PER SHARE (EPS)3 89.3 MMboe 2% 8.3 $/boe 6% $ 1.9 billion 11% 102 US cps 11% On track to deliver full year 2024 Unit producti
Slide 6: Safety: continued focus on improvement
Safety: continued focus on improvement H1 2024 performance Recordable injuries No permanent injuries recorded 1 Fatalities Two Tier 2 safety events 38 Achieved safe delivery of Sangomar Project with 30 million exposure hours 27 30 26 Other on the FPSO without a serious injury recordables 11 FY 2020
Slide 7: Growing need for energy as population and living standards increase
Growing need for energy as population and living standards increase Energy consumption per capita, 2022 (MMbtu)2 200 Number of people lacking access to electricity 150 remains high, estimated ~685 million people in 20221 100 Energy consumption underpins development: as countries’ living standards im
Slide 8: Opportunity for LNG to accelerate coal displacement
Opportunity for LNG to accelerate coal displacement Global coal consumption and global LNG trade (exajoules)1 180 160 140 Coal remains a significant portion of energy mix, 120 Asia Pacific 100 accounting for 25% of global primary energy Rest of world 80 North America consumption in 20231 60 Europe 4
Slide 9: New supply finds demand with resilient pricing
New supply finds demand with resilient pricing Demand drivers continue to develop Historical LNG price ($/MMbtu) and historical global LNG supply growth (Mtpa)1,2 Customers’ decarbonisation goals 70 China and India growing net energy imports 60 “looming glut could have far- Price sensitivity of buye
Slide 10: High-quality portfolio delivering results
High-quality portfolio delivering results Low-cost, reliable production Production (MMboe) and unit production cost ($/boe) Maintained cost focus, unit production cost down despite inflationary pressures 8.8 Continued to achieve strong operated LNG reliability of 97.9% 8.3 Unit production cost Avera
Slide 11: Sangomar: successfully delivered Senegal's first oil project
Sangomar: successfully delivered Senegal’s first oil project First oil achieved in June 2024 Achieved nameplate capacity of 100,000 bbl/day in July1 Nine of 12 production wells cleaned up, excellent subsurface performance1,2 Drilling campaign complete1 Three cargoes loaded to date, with deliveries t
Slide 12: Scarborough: 67% complete and on track for first LNG cargo in 2026
Scarborough: 67% complete and on track for first LNG cargo in 2026 1 FPU topsides structurally complete, hull exited first dry dock2 Trunkline installation more than 50% complete Subsea flowlines installed and tested 29 of 51 Pluto Train 2 modules delivered to site Development well drilling commence
Slide 13: Trion: approaching 10% complete, on track for first oil in 2028
Trion: approaching 10% complete, on track for first oil in 2028 Priority equipment on order per plan to support FPU construction Awarded key contract for FPU transportation Subsea equipment delivery progressing, and manufacturing underway across the globe Awarded subsea equipment installation contra
Slide 14: Tellurian: acquisition creates a global LNG powerhouse
Tellurian: acquisition creates a global LNG powerhouse Attractive entry into a scalable, fully permitted, 27.6 Mtpa US LNG development option with a cost-competitive phased development plan1 Providing energy Pathway to material complementary presence in the Atlantic Basin, enabling value and arbitra
Slide 15: Driftwood LNG: Woodside's expertise can uplift value
Driftwood LNG: Woodside’s expertise can uplift value Expected project returns - IRR (%)1 12%+ 5-10% Woodside’s experience in LNG project delivery and operations excellence can improve returns >95% reliability Driftwood LNG is advantaged by permitting position and Proven debottlenecking experience ha
Slide 16: OCI: one of the world's first lower carbon ammonia projects
OCI: one of the world’s first lower carbon ammonia projects 1.1 Mtpa project under construction; with cost, schedule and performance guarantees, targeting production of first ammonia from 2025 and lower carbon ammonia from 20261,2,3 Providing energy Exceeds Woodside’s capital allocation framework ta
Slide 17: OCI: attractive growing market underpinned by policy development
OCI: attractive growing market underpinned by policy development Europe Increasing ammonia price forecasts ($/tonne)1 1,000 S&P lower carbon Carbon Border Adjustment Mechanism (CBAM) is already regulated, 800 Argus lower carbon complements existing EU ETS Wood Mackenzie Blue 600 Ammonia2 Argus unaba
Slide 18: Capital management framework unchanged
Capital management framework unchanged 2.4B 1.7B 5.4B 1.3B Operating Investing $ Dividend $ $ 2 Net debt1 $ cash flow cash flow determined Special dividends Safe, reliable and Dividend policy Investment Strong balance low cost (minimum 50% Share buy-backs expenditure sheet operations payout ratio) E
Slide 19: Disciplined capital management, long-term shareholder value
Disciplined capital management, long-term shareholder value Consistent cost focus Disciplined investment Actively managed decisions balance sheet Unit production costs down and cash Acquisitions must have compelling strategic Active management of debt portfolio conversion up rationale and meet capit
Slide 20: Strong underlying NPAT: maintaining 80% payout ratio
Strong underlying NPAT: maintaining 80% payout ratio Financial performance Dividend distribution $4.4 billion EBITDA is underpinned by strong operational performance Interim dividend of $1.3 billion, fully franked, representing a half-year and gain on sell-down of interest in Scarborough Joint Ventu
Slide 21: Resilient cash margin supporting capital investment and returns
Resilient cash margin supporting capital investment and returns Cash Balance sheet Cash margin of 81%, maintained amid reduced commodity price and Gearing of 13% at the lower end of target range inflationary environment Strong liquidity supporting major capital investment and returns $2.4 billion op
Slide 22: Emissions reduction remains a key focus
Emissions reduction remains a key focus On track to meet Scope 1 and 2 targets Emissions intensity reductions through reliable operations, emissions reduction activities and large-scale abatement opportunities Progressing 70 ‘operate out’ opportunities targeted for implementation by 2030 First Austr
Slide 23: Supporting the communities where we operate
Supporting the communities where we operate Significant economic contribution TAX AND ROYALTY PAYMENTS WA BUSINESS IMPACT A$2.7 billion >A$2.4 billion Paid to Australian State and Federal >A$1.46 billion of NWS capital and Governments in H1 2024 operating expenditure and >A$989 million of Scarboroug
Slide 24: Delivering on 2024 strategic priorities
Delivering on 2024 strategic priorities Operate base business reliably and efficiently Providing energy Sangomar first oil and nameplate capacity achieved through a high-quality portfolio, geographically advantaged to meet Progress Scarborough Energy Project and Trion growing LNG demand1 Complete ac
Slide 25: Q&A
Q&A Meg O’Neill Chief Executive Officer and Managing Director
Slide 26: Annexure
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Slide 27: Strong earnings and balance sheet from diversified global portfolio
Strong earnings and balance sheet from diversified global portfolio H1 2024 H1 2023 Change Operating revenue $m 5,988 7,400 19% EBITDA1 $m 4,371 4,888 11% Strong half-year underlying NPAT EBIT1 $m 2,362 2,791 15% NPAT $m 1,937 1,740 11% $8.5 billion liquidity enabling investments in near-term growth
Slide 28: Our investment premise
Our investment premise Provide energy Create and return value Conduct our business sustainably High-quality portfolio weighted to LNG Disciplined capital management and clear Emissions reduction targets2 capital allocation framework LNG forecast to grow >50% in next 10 years1 Progressing customer-le
Slide 29: Disciplined capital allocation
Disciplined capital allocation OIL GAS NEW ENERGY OFFSHORE PIPELINE LNG DIVERSIFIED Generate high returns to fund New energy products and lower Leveraging infrastructure to monetise undeveloped FOCUS diversified growth, focusing on gas, including optionality for hydrogen carbon services to reduce cu
Slide 30: Net profit after tax reconciliation
Net profit after tax reconciliation SALES COST OF SALES GENERAL, ADMINISTRATIVE, TAX AND OTHER INTERIM DIVIDEND, FULLY FRANKED Lower production cost from planned Impact of lower realised maintenance, and reduced Fully franked interim dividend prices and natural field One-off transactions and tax imp
Slide 31: Disciplined cost management offsetting natural field decline
Disciplined cost management offsetting natural field decline Operating revenue EBITDA1 Underlying NPAT1,2 7.4 4.9 1.9 1.8 4.4 1.6 6.0 4.0 5.8 $ billion $ billion $ billion 2.5 1.5 1.9 1.0 0.4 0.3 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 2020 H1 2021 H1 2022
Slide 32: Investing in near and long-term growth
Investing in near and long-term growth Operating cash flow1 Investing cash flow2,3 Free cash flow4 2.6 2.6 3.0 0.9 2.5 1.1 2.4 $ billion $ billion $billion 0.3 1.3 1.0 1.1 0.8 0.7 1.0 1.7 1.5 0.3 0.3 0.3 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 2020 H1 2021
Slide 33: Disciplined balance sheet management
Disciplined balance sheet management Net debt3 5.4 4.7 Gearing of 13% and actively managing debt portfolio 3.9 3.8 $ billion Scarborough Joint Venture sell-down proceeds supporting liquidity: 0.6 10% non-operated participating interest to LNG Japan completed in March 2024, received $910 million FY
Slide 34: We are a strong contributor to the economy
We are a strong contributor to the economy Australian tax contribution 5.0 Largest payer of PRRT in Australia1 $ billion A$2.7 billion in Australian taxes, royalties and levies paid in H1 2.7 2.7 2024 >US$300 million in foreign taxes paid in H1 2024 A$2,030m | Corporate income tax Global all-in norm
Slide 35: 2024 full-year guidance unchanged
2024 full-year guidance unchanged 1 Production Woodside’s full-year 2024 production guidance is 185 – 195 MMboe (505 – 533 Mboe/day) Capital expenditure2 Woodside’s full-year 2024 capital expenditure guidance is US$5.0 – 5.5 billion Gas hub exposure Woodside expects approximately 26-33% of its
Slide 36: Testing project competitiveness in energy transition
Testing project competitiveness in energy transition Driftwood LNG (pre-FID)1 OCI’s Clean Ammonia Project Financial impacts assessed under various price Expected >10% IRR and <10-year payback period, Investment attractiveness • • 1 assumptions, which include climate-related scenarios1 exceeding capi
Slide 37: Asset tables
Asset tables Depreciation and Operating revenue EBITDA1 EBIT1 Capital expenditure Production costs Asset amortisation2 $ million $ million $ million $ million $ million $ million Australia North West Shelf 1,134 940 367 573 70 87 Pluto 1,710 1,489 413 1,076 44 169 Wheatstone 411 363 160 203 29 31 Ba
Slide 38: Asset tables
Asset tables Depreciation and Operating revenue EBITDA1 EBIT1 Capital expenditure Production costs Asset amortisation2 $ million $ million $ million $ million $ million $ million International Trinidad & Tobago 98 72 19 53 - 36 Atlantis 364 281 161 120 32 74 Shenzi 394 311 251 60 5 69 Mad Dog3 453 4
Slide 39: Realised price
Realised price Products Units H1 2024 H1 2023 Variance LNG produced1 $/boe 63 88 (25) LNG traded2 $/boe 59 90 (31) Pipeline gas $/boe 36 38 (2) Oil and condensate $/boe 81 75 6 NGLs $/boe 46 47 (1) Liquids traded $/boe 61 70 (9) Average realised price $/boe 63 74 (11) Average Dated Brent $/bbl 84 80
Slide 40: Glossary
Glossary $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars EPC Engineering, procurement and construction A$, AUD Australian dollar EPS Earnings per share Woodside uses this term to describe an aspiration to seek the achievement of an outcome but where Woodside set
Slide 41: Glossary
Glossary Woodside uses this term to describe the characteristic of having lower levels of associated potential GHG Operating cash flow Cash flow from operating activities Lower carbon emissions when compared to historical and/or current conventions or analogues, for example relating to an otherwise
Slide 42: Glossary
Glossary Other indirect GHG emissions. Scope 3 is a reporting category that allows for the treatment of all other Underlying earnings per share or Underlying net profit after tax divided by weighted average number of shares on issue indirect emissions. Scope 3 emissions are a consequence of the acti
Slide 43: 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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