Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Woodside Petroleum — FY2021 Earnings Presentation
45 slides from Woodside Energy's earnings presentation, Feb 17, 2022
Slide 1: ASX Announcement: Woodside Full-Year 2021 Results
ASX Announcement Woodside Petroleum Ltd. ACN 004 898 962 Mia Yellagonga Thursday, 17 February 2022 11 Mount Street Perth WA 6000 ASX: WPL Australia OTC: WOPEY T +61 8 9348 4000 www.woodside.com.au WOODSIDE FULL-YEAR 2021 RESULTS Woodside has recorded full-year net profit after tax (NPAT) of US$1,983
Slide 2: Financial headlines and key business activities
“We had a reserves downgrade on Julimar-Brunello and a reserves revision on the Greater Pluto region following the completion of integrated subsurface studies incorporating 4D seismic and well performance data. “Our safety performance was disappointing, with our total recordable injury rate increasi
Slide 3: Climate Report, AGM and results teleconference
Climate Report 2021 Woodside has released our Climate Report, which outlines our approach to climate change and strategy for Woodside to thrive through the energy transition as a low-cost, lower-carbon energy provider. Annual General Meeting Woodside’s 2022 Annual General Meeting (AGM) will be held
Slide 4: Full-Year Results Briefing
FULL-YEAR RESULTS BRIEFING 17 February 2022
Slide 5: Disclaimer, risks and assumptions
Disclaimer, risks and assumptions Disclaimer and risks assumptions and technical parameters underpinning the estimates in the Reserves Statement continue to apply and have • This presentation contains forward looking statements that are subject to risk factors, including those associated with oil no
Slide 6: Strong financial and strategic achievements
Strong financial and strategic achievements DELIVERED VALUE STRATEGIC DECISIONS Net profit after Underlying net tax profit after tax Agreed merger Achieved final 1,983 1,620 investment decisions with BHP’s petroleum $ $ business for Scarborough and million 149% million 262% Pluto Train 2 Full-year d
Slide 7: Maximising value through operational excellence
Maximising value through operational excellence FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Operating revenue Annual production 6,962 91.1 Production impacted by natural $ Increased trading activity and field decline, adverse weather and million 93% realised prices MMboe 9% increased turnaround ac
Slide 8: Health and safety
Health and safety Tier 1 or Tier 2 loss of primary Total recordable injuries (TRI) and containment process safety total recordable injury rate (TRIR) events 4 30 2.00 1.74 3 1.80 Zero Tier 1 or Tier 2 loss of primary 25 1.32 1.60 containment process safety events 3 1.29 1.40 20 2 2 19 1.20 Disappoin
Slide 9: Seven-year high average realised price
Seven-year high average realised price Average realised price Average realised price and oil and gas price markers $ 60.3 60.3 100 54.2 49.9 60 43.9 86% 75 $/boe 32.4 $/MMBtu $/bbl 40 50 25 20 2017 2018 2019 2020 2021 Products FY21 FY20 Q1: $44 Q2: $46 Q3: $59 Q4: $90 0 0 LNG1 $/boe 58.1 31.2 Q1 202
Slide 10: Compelling merger strategic rationale
Compelling merger strategic rationale CASH SHAREHOLDER ENERGY SYNERGIES AND PORTFOLIO GENERATION RETURNS AND DEVELOPMENT TRANSITION VALUE QUALITY AND BALANCE CAPITAL OPTIONALITY LEADERSHIP CREATION SHEET DISCIPLINE Supports superior Enhanced Complementary, Strengthens cash Increased capacity to Oppo
Slide 11: ESG is an integral part of our business
ESG is an integral part of our business Environmental • Continued support for the Burrup Air Monitoring Program • Sold carbon offset cargoes; LNG, LPG and condensate • Safe plugging and abandonment of Echo Yodel and Capella wells • Undertook a range of biodiversity focused initiatives and research i
Slide 12: A clear plan for a lower-carbon future
A clear plan for a lower-carbon future Reduce our net equity Invest in the products and services greenhouse gas emissions our customers need (Scope 1 & 2) as they reduce their emissions STRATEGY CAPITAL PROMOTE OFFSET SUPPORT VALUE DESIGN OUT OPERATE OUT ALLOCATION MEASUREMENT PORTFOLIO CHAIN TARGET
Slide 13: Thriving through the energy transition
Thriving through the energy transition PROFITABLE LOWER CARBON RESILIENT OPTIMISE VALUE AND LOW COST DIVERSIFIED SHAREHOLDER RETURNS 10
Slide 14: Financial Update
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Slide 15: Demonstrated strong business fundamentals
Demonstrated strong business fundamentals • Recovery in oil and gas prices driving operating revenue of $6,962 million Recovery in price environment • Achieved realised price of $60.3/boe, an increase of 86% over the previous year Reported NPAT Strong operational and cost performance generated $851
Slide 16: Consistent operational performance supporting increased investment
Consistent operational performance supporting increased investment Products FY21 FY20 Change Operating revenue $m 6,962 3,600 93% Significant operating revenue growth due to improved market pricing EBITDA $m 4,135 1,922 115% EBIT $m 3,493 (5,171) 168% Investing in major growth projects NPAT $m 1,983
Slide 17: Production and sales volumes
Production and sales volumes Production volume • Production impacted by: 100.3 • Expiry of NWS joint domestic gas contract obligations 91.4 89.6 91.1 84.4 • Cessation of production from the Angel field in 2020 MMboe • Turnaround activity on NWS Project and Wheatstone • Adverse weather events in H1 2
Slide 18: 262% increase in underlying NPAT
262% increase in underlying NPAT Operating revenue EBITDA Underlying NPAT 7.0 4.1 1.6 3.8 1.4 3.5 5.2 4.9 2.9 1.1 1.1 4.0 $ billion $ billion 3.6 $ billion 1.9 0.4 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Earnings and NPAT benefited from optimisation activities and
Slide 19: Full year 2021 profit bridge
Full year 2021 profit bridge Increased trading activity, Category $ million increased cargo prices and Myanmar exit 209 Category $ million 2021 Corpus Christi liftings Kitimat exit 33 2020 impairment 5,269 Joint venture recoveries 4 Corpus Christi onerous 447 Impairment reversal (582) contract provi
Slide 20: Resilient free cash flow
Resilient free cash flow Operating cash flow Investment Free cash flow1 3.8 3.3 3.3 2.1 2.9 1.5 2.4 2.1 $ billion $ billion $ billion 1.8 1.8 0.9 0.8 1.6 1.2 -0.3 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Investing in the future through increased expenditure on Scarb
Slide 21: Strong operating cash flow supporting our investments
Strong operating cash flow supporting our investments Free cash flow $851 million 3,792 (2,941) Cash flow from financing ($1,424 million) (784) 3,604 (289) (351) (6) 3,025 $ million Cash flow generated from Includes contingent Includes redemption of Includes lease liability operations, includes paym
Slide 22: Strong margins across portfolio
Strong margins across portfolio Gross margin Five-year gross margin trend Cash margin 51% 50% GROSS MARGIN Australia Oil 13 1 65 27.9 44% 45% 45% $/sales boe Pluto 42 51 Wheatstone 5 3 49 PRODUCTION AND OTHER COSTS 33% 20.6 $/sales boe 17% NWS Gas 5 10 47 DEPRECIATION AND AMORTISATION 13.9 Group 5 5
Slide 23: Balance sheet strength
Balance sheet strength Net debt Gearing Dividend per share Average annual Target gearing 160 71 71 dated 80 Brent 4.7 64 ($/boe) range: 15-35% 140 54 144 60 3.9 3.8 135 120 42 23.9 24.4 21.9 40 100 2.8 98 $ billion 2.4 % 12.1 80 91 Full-year 20 14.4 dividend 60 (US- cps) 40 38 (20) 20 0 (40) 2017 20
Slide 24: Debt and liquidity
Debt and liquidity Continuing strong liquidity Balanced debt maturity profile 7.0 6.7 1.5 6.1 Includes repayment of $700m bond and refinancing $400m of facilities 1.0 Low portfolio cost of debt (2.7%) and 3.9 $ billion portfolio weighted average term to $ billion 2.9 maturity of 4.0 years 0.5 Credit
Slide 25: Proactive marketing strategy capturing market upside
Proactive marketing strategy capturing market upside 2021 highlights • Enables optimisation and flexibility of the existing portfolio • 21 cargoes in 2021 compared to 2 in 2020 (excluding Corpus Christi) • Expecting a similar volume to be traded in 2022, subject to market Trading activity significan
Slide 26: Trading outlook
Trading outlook 2022 gas hub exposure guidance of 20-25% • New definition reflecting evolution in our business and market; replaces previous ‘spot exposure’ guidance • Woodside’s contract portfolio is becoming increasingly linked to a range of price indices • Gas hub exposure is defined as the propo
Slide 27: 2022 guidance
2022 guidance 2022 production guidance 2022 investment expenditure guidance • Woodside’s investment expenditure guidance is $3,800 – 4,200 million. • Woodside’s production guidance is 92 – 98 MMboe, excluding any impact from the proposed merger with BHP’s petroleum business • Investment expenditure
Slide 28: Projects
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Slide 29: Scarborough and Pluto Train 2 approved
Scarborough and Pluto Train 2 approved Scarborough floating First cargo Targeting 2026 production unit World-class resource and globally Pluto Resource size 11.1 Tcf resource size, 100%1 platform competitive project 8 Mtpa of LNG development Development size plus 225 TJ/day domestic gas 1P reserves
Slide 30: Sangomar – on track for first oil in 2023
Sangomar – on track for first oil in 2023 Senegal’s first oil project which targets the production of an estimated 231 million barrels of oil resources (100%) with 2P Reserves of 149 MMbbl Woodside economic share. 2021 highlights • Drilled and completed the first horizontal production well; the full
Slide 31: Outstanding project execution
Outstanding project execution Pluto-KGP Interconnector • Pipeline construction completed in Q4 2021 Enables the transfer of gas between Pluto LNG and NWS Project • Commissioning activities underway; targeting ready for start-up in Q1 2022 Phase 1 (Pyxis and Pluto North wells) achieved ready for star
Slide 32: Priorities
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Slide 33: Merger timeline to completion
Merger timeline to completion 17 August 2021 22 November 2021 Q1 2022 Early April 2022 Merger commitment deed Share sale agreement and Pursuing secondary listings on Target for release of shareholder executed integration and transitional the New York Stock materials services agreement executed Excha
Slide 34: Nominated leadership team after merger
Nominated leadership team after merger CEO Australia International Exploration and Marketing and New Energy Development Trading Operations Operations Shaun Gregory Mark Abbotsford Fiona Hick Shiva McMahon Andy Drummond Perth Perth Perth Houston Houston Technical Corporate Strategy and Projects Finan
Slide 35: Clear priorities
Clear priorities Maintain reliable and efficient operations 1 OPERATIONAL Return to leading personal safety performance Complete merger with BHP’s petroleum business and deliver synergies 2 STRATEGIC Continue execution of Scarborough and Pluto Train 2 Advance Sangomar project execution Achieve new e
Slide 36: Annexure
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Slide 37: Pluto LNG
Pluto LNG 2021 highlights Products FY21 FY20 Production volume MMboe 44.3 44.6 • Set new targets for Pluto LNG to reduce greenhouse gas emissions LNG reliability % 97.2 97.2 under the contemporised Pluto Greenhouse Gas Abatement Program Operating revenue $m 2,794 1,587 • Achieved Pyxis Hub ready for
Slide 38: NWS Project
NWS Project 2021 highlights Products FY21 FY20 Production volume MMboe 24.7 30.8 • Strong reliability performance LNG reliability % 98.3 98.0 • Delivered 14% reduction in underlying operating costs Operating revenue $m 1,530 976 Unit production cost $/boe 4.7 3.8 • Established a marketing entity to
Slide 39: Wheatstone and Julimar-Brunello
Wheatstone and Julimar-Brunello 2021 highlights Products FY21 FY20 Production volume MMboe 13.5 15.2 • Achieved ready for start-up of Julimar-Brunello Phase 2 Operating revenue $m 772 486 Unit production cost $/boe 5.3 4.7 • Completed Phase 1 of the Wheatstone major turnaround EBITDA $m 615 355 • Pr
Slide 40: Australia Oil
Australia Oil 2021 highlights Products FY21 FY20 Production volume MMboe 8.6 9.7 • Successfully executed Okha FPSO major turnaround Operating revenue $m 673 432 Unit production cost $/boe 12.7 11.0 • Delivered revenue optimisation activities EBITDA $m 464 222 • Production impacted by adverse weather
Slide 41: Realised price
Realised price Revenue 2021 2020 Variance Products impact $/boe $/boe % $ million LNG1,2 58 31 86 2,456 Domestic gas 17 14 22 8 Condensate 74 40 84 293 Oil 79 44 78 295 LPG 82 44 86 28 Volume-weighted average 60 32 86 3,080 Average Dated Brent 71 42 70 Average 3-month lagged JCC 60 51 17 1. LNG real
Slide 42: Corporate performance
Corporate performance 2021 2020 Production volume MMboe 91.1 100.3 Operating revenue $ million 6,962 3,600 EBITDA $ million 4,135 1,922 EBIT $ million 3,493 (5,171) Net finance costs $ million 203 269 Tax expense/(benefit) $ million 1,254 (1,465) Non-controlling interest $ million 53 53 NPAT $ milli
Slide 43: 2021 segment performance
2021 segment performance NWS Pluto Australia Oil Wheatstone Production volume MMboe 25 44 9 14 Operating revenue $ million 1,530 2,794 673 772 EBITDA $ million 1,181 2,424 464 615 EBIT $ million 1,358 2,197 244 356 Cash margin % 76 88 82 85 Gross margin % 63 53 51 53 40
Slide 44: Additional information for US investors
Additional information for US investors No offer or solicitation Disclosure of reserve information and cautionary note to US investors • This presentation includes information relating to the proposed Transaction between Woodside and BHP. • Unless expressly stated otherwise, all estimates of oil and
Slide 45: Head Office
Head Office: Woodside Petroleum 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.au Woodside Petroleum Ltd ABN 55 004 898 962 woodside.com.au