Woodside Energy Group Ltd · ASX:WDS

Woodside Energy — Woodside Petroleum — FY2015 Earnings Presentation

43 slides from Woodside Energy's earnings presentation, Feb 17, 2016

1. Slide 1: 2015 full-year results briefing

   2015 full-year results briefing Peter Coleman | Chief Executive Officer and Managing Director 17 February 2016

2. 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

3. Slide 3: Key messages

   Key messages A resilient business model  Strong balance sheet  Maintaining liquidity and flexibility  Relentless focus on productivity and reliability  Executing our strategy and delivering on what we control 2015 full-year results briefing 3

4. Slide 4: Achievements

   Achievements Delivered operating and development commitments  Achieved second highest production result, 92.2 MMboe  Improved safety performance by ~60% since 2012  Met project deliverables Achieved reserves and resources growth  2P Reserves replacement ratio 276%  2P reserves up 13%; 2C contin

5. Slide 5: Financial headlines

   Financial headlines Profit: US$ million1 Net profit after tax (NPAT) 26 NPAT excluding one-off non-cash items2 1,126 Full-year dividend 109 cps3 Cashflow: Operating cash flow 2,376 Break-even cash cost of sales ~$11/boe Unit production costs $6.8/boe Balance Sheet (31 December 2015): Available funds

6. Slide 6: Safety and Environment

   Safety and Environment Continued multi-year progress to top-quartile international performance 5.0 Safety TRIR per million hours worked 4.0 3.0  No Tier 1 process safety events 2.0 1.0  TRIR improved ~60% over 4 years 0.0 2011 2012 2013 2014 2015  Peak intensity flared gas improved since TRIR 1 T

7. Slide 7: Strategy is delivering value

   Strategy is delivering value Managing the things we control 2011 2015 Dividends Cps 110 109  $7 billion fully franked dividends over five years Unit production cost $/boe 7.51 6.83  Unit production cost down 9% Contingent Resources (2C) MMboe 2,137 4,398  Contingent resources up 106% Production M

8. Slide 8: 2015 – choices made

   2015 – choices made Our response to a changing environment demonstrates resilience of our strategy Responded to external environment  Reduced cost; reduced staff; reorganised; froze wages External Maintained balance sheet strength environment  Refinanced, reducing the cost of debt  Maintained str

9. Slide 9: Maintaining resilience 2016/2017

   2016/2017 Maintaining resilience  Maintain a strong balance sheet  Business planning based on $35/bbl oil  DRP reactivated to preserve cash  Continue implementing our strategy  Prudent decisions to support credit rating 2015 full-year results briefing 9

10. Slide 10: Financial management

    Financial management Lawrie Tremaine | Chief Financial Officer

11. Slide 11: Reported profit

    Reported profit Reduction due to lower commodity prices and impairments 2,500 2,414 2,580 2,000 Revenue down 36% 1,500  Oil prices down 46% 1,000  Oil price impact partly offset by LNG contracts US$m 500 79 969 51 26 One off non-cash charges: - 649  Asset impairments $1,083m (500) 219 185 96 (201

12. Slide 12: Production

    Production Our second highest result of 92.2 MMboe, down 3% from 2014 record Production 100.0  Pluto turnaround executed ahead of plan 90.0  Increased LNG plant capacity 80.0 70.0  NWS increased from 16.3 to 16.7 mtpa 60.0  Pluto delivered annualised production equivalent to 4.9mtpa in Q4 2015 5

13. Slide 13: Unit production costs

    Unit production costs Continued cost reduction over the past three years Gas 400 Oil 70.00 500 Pluto turnaround Balnaves oil 429 14.00 350 338 450 60.00 409 304 293 300 400 364 12.00 300 354 266 50.00 350 38 10.00 250 300 63 40.00 34.2 250 8.00 200  Gas impacted by 200 192 5.2 5.5 6.00 150 25.8 30.

14. Slide 14: Liquidity

    Liquidity Negligible debt maturities in 2016 and 2017 Debt maturity profile  Raised $4.1 billion of new and refinanced 1,500 debt in 2015  Pre-tax portfolio cost of debt 2.9% p.a. at December 2015 1,000  $1.7 billion in cash and undrawn facilities at end 2015 US$m 500  Dividend Reinvestment Plan

15. Slide 15: Productivity program

    Productivity program >$700 million in benefits in 2015 Target 2015  Production volume increases through reliability 3-5% 9% 1 and capacity improvements provided more than half the benefits 10-20% 20%2  Expenditure savings are at the top end of the expected range 10-20% 16%  Removed ~650 positions

16. Slide 16: Business update

    Business update

17. Slide 17: Wheatstone

    Wheatstone Julimar on schedule, Wheatstone delayed but LNG contracts can be met  Impairment reflects lower short and long term oil price assumptions Julimar Project1:  80% complete at 31 December  Targeting ready for start up 2H 2016 Wheatstone Project2:  Over 65%3 complete  Targeting first LNG

18. Slide 18: Greater Enfield

    Greater Enfield Our focus is on delivering value improvements Key 2015 activities:  Entered FEED phase in August 2015  Issued preliminary FDP1 Future activities:  Technical activities and value improvement  Further cost saving sought  Targeting to be ready for FID in late 2016 Schematic of FLNG

19. Slide 19: Browse FLNG Development

    Browse FLNG Development Browse working hard to deliver an economically robust project Key 2015 activities:  Entered FEED  Granted Commonwealth and State retention lease renewals Image courtesy of Shell Future activities:  Require further cost reductions  Must be NPV positive at low price assumpt

20. Slide 20: Global exploration strategy

    Global exploration strategy Maturing and high grading prospects Rebalancing portfolio  Considerable progress made  Reduced exposure to frontier and increased exposure to emerging acreage (proven hydrocarbon systems with upside potential) High-grading  Exiting/reducing exposure to low prospectivit

21. Slide 21: Myanmar

    Myanmar Back to back discoveries: a key portfolio focus area off to a great start  Early mover strategy delivers 47,000 km2 acreage  Diversity in play type and commercialisation options  Material equity position and strong partnerships  Discoveries in A-6 and AD-7 establishing basin credentials

22. Slide 22: Recap

    Recap A resilient business model  Strong balance sheet  Maintaining liquidity and flexibility  Relentless focus on productivity and reliability  Executing our strategy and delivering on what we control 2015 full-year results briefing 22

23. Slide 23: Appendix: Business activities

    Appendix 1 Business activities

24. Slide 24: Reserves and resources

    Reserves and resources Reserves Replacement Ratio of 276% Proved plus Probable (2P) Annual Total Reserves Replacement Ratio 276% Reserves Replacement Ratio (Total) Increased reserves and contingent resources  2P reserves up 12.7% to 1,508 MMboe  2C contingent resources up 152% to 4,398 MMboe 25% 1

25. Slide 25: Reliability and Capacity

    Reliability and Capacity Increasing reliability and capacity Pluto LNG reliability 100 Reliability: 97.1 96.9  Pluto achieved top-quartile performance Average reliability (%)  NWS impacted by electrical incident 90.7 90 LNG production capacity: 87.2  NWS increased from 16.3 to 16.7 mtpa  Pluto d

26. Slide 26: People

    People Continuing to grow a culture for a long-term sustainable future Resourcing levels 4,084 3,764  Reduction of 652 FTE’s in two years 3,432  2015 graduate intake of 108, up 5% on 2014  Females comprise: FTEs  49% of graduate intake  28% of our workforce 2013 2014 2015 2015 full-year results

27. Slide 27: NWS

    NWS High investment return tie-back projects extend NWS plateau GWF-1:  First gas received from Goodwyn GH field in late 2015  Tidepole field production in early 2017  Unit development costs (UDC1) of ~US$7.00/boe Persephone:  Scheduled start-up early 2018  UDC1 of ~US$7.70/boe GWF-2:  Schedul

28. Slide 28: Kitimat LNG

    Kitimat LNG Appraising the Liard resource Key 2015 activities:  Drilled four appraisal wells in Liard basin  Completed two proof of concept wells each with over a 2,250 m horizontal length  Wells being brought on-line with early flow rates in line with expectations Key focus areas to progress the

29. Slide 29: Development pipeline

    Development pipeline Currently few commitments after 2016 1 2016 2017 2018 2019 2020 US$ m Committed projects 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H NWS GWF 1 290 Persephone 140 GWF 2 330 2 Wheatstone 1,858 Wheatstone Julimar Uncommitted (pre-FID) projects Browse Greater Enfield Kitimat Concept Select Concep

30. Slide 30: Global exploration pipeline

    Global exploration pipeline Drilling and seismic activities maturing with low commitments (1) 2016 2017 Size Target Drilling Q1 Q2 Q3 Q4 Q1 Q2 Australia Beagle Basin Skippy Rock Medium Oil Stokes(4) Small Oil WA-483-P Swell Large Gas International Myanmar Thalin Large Gas A-6 TBA (3) Large Gas A-6 T

31. Slide 31: Appendix: Financial Annexure

    Appendix 2 Financial Annexure

32. Slide 32: Operating revenue

    Operating revenue Operating revenue of $5,030 million – down 32%, Brent oil price down 46% 12,000 120.00 111 112 109 99 10,000 100.00 Decreased revenue from: Average Brent oil price (US$/bbl)  Price impact: $2,393 million Operating revenue (US$m) 8,000 80.00 7,435  Volume impact: $120 million 6,00

33. Slide 33: Product pricing

    Product pricing LNG contracts provide some protection against a ~50% oil price reduction US$/boe US$m % Revenue Products 2015 2014 Variance impact NWS LNG 45 73 (38) (636) LNG price change reflects: Pluto LNG 59 81 (27) (776)  Pluto 2014 price review1 Pipeline natural gas 22 28 (21) (15) Condensate

34. Slide 34: Cash costs and margins

    Cash costs and margins Low LNG cash costs of sales drive continued strong cash margins Weighted average unit cash margins trend 2015 unit cash margins by business unit 58 58 62 51 27 39 50 38 0 US$/boe 29 US$/boe 8 8 4 24 9 7 3 4 6 9 11 8 8 7 7 4 5 2011 2012 2013 2014 2015 NWS Gas NWS Oil Aus Oil Pl

35. Slide 35: Investment expenditure

    Investment expenditure 4000 ~260 Growth 3000 ~450 Plateau extension 308 2000 163 ~90 Sustaining and restoration ~280 3,640 230 Pluto US$m ~290 436 ~230  Well developments ~$200m and sustaining 208 capex ~$20m ~350 1000 ~140 NWS 1,018  Greater Western Flank 1 and 2 and ~760 Persephone ~$170m, Karra

36. Slide 36: Sources and uses of cash

    Sources and uses of cash 10,000 2015 8,000  2016 cash flow from operations is expected 6,000 to exceed committed investment expenditure, US$m notwithstanding current prices 4,000 2,000 0 Sources Uses Cash flow from operations Capital and Exploration expenditure Cash at beginning of year Dividend pa

37. Slide 37: Capital management

    Capital management Gearing within target range of 10% - 30% following acquisition of assets Net debt and gearing 40 35 5,000 28.6 30 26.3  Acquisition of Wheatstone, Net dbet (US$m) 25 % gearing Target 23.3 Balnaves and Kitimat interests 3,000 gearing range 20 increased gearing to 23% 5,061 4,319 1

38. Slide 38: Dividend

    Dividend US43 cents per share fully franked final dividend Full-year dividends per share 303 269  Final dividend of US43 cps1 US cps 154 2  Full year dividend of US109 cps1 (AUD154 cps)2 127 249 255  Represents an 80% payout ratio 111 103  Dividend Reinvestment Plan reactivated 130 105 110 109 2

39. Slide 39: Dividend calculation

    Dividend calculation 2015 NPAT adjusted for one-off non-cash items Calculation of dividend Pre-tax Post tax (US$ millions) (US$ millions) Reported full year NPAT 26 Adjustments: Impairment of oil & gas properties 1,083 756 Pluto PRRT DTA de-recognition 363 254 Balnaves FPSO Onerous lease 128 90 Prof

40. Slide 40: Impairments of oil and gas properties

    Impairments of oil and gas properties Impairments after tax totalled US$756 million 2015 Impairments US$m Pre-tax Post-tax  Oil price assumptions: Enfield 18 8 Balnaves 10 7  2016-2018: 31 December forward curve Laminaria-Corallina (95) (40)  2019-2020: Woodside forecast Vincent 85 36 NWS Oil 200

41. Slide 41: 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  NWS and Pluto margins Production volume (MMboe) 44.7 37.5 9.8 remain substantial even in a low price environment Operating revenue ($million) 1,788 2,377 51

42. Slide 42: Consensus

    Consensus 2015 NPAT adjusted for one-off non-cash items and dividend ahead of consensus Analyst Woodside consensus Variance NPAT adjusted for one-off non-cash items $m 1,126 1,012 114 Final dividend US cps 43 32 11 2015 full-year results briefing 42

43. Slide 43: Notes on Petroleum Resource Estimates

    Notes on Petroleum Resource Estimates Notes on Petroleum Resource Estimates 1. Unless otherwise stated, all petroleum resource estimates are quoted as at the balance date (i.e. 31 December) of the Reserves Statement in Woodside’s most recent Annual Report released to ASX and available at http://www.

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