Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Merger or Acquisition (August 2024)
25 slides from Woodside Energy's merger presentation, Aug 5, 2024
Slide 1: Woodside to acquire OCI's Clean Ammonia Project
WOODSIDE TO ACQUIRE OCI’S CLEAN AMMONIA PROJECT 5 August 2024 www.woodside.com investor@woodside.com
Slide 2: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the • This presentation has been prepared
Slide 3: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) Forward-looking statements (continued) contingencies, refer to Woodside's Climate Transition Action Plan and 2023 Progress Report (CTAP) available on the Woodside website at https://www.woodside.com/sustainability/climate-change. The glossary a
Slide 4: Acquiring one of the world's first lower carbon ammonia projects
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 fram
Slide 5: Building platform to thrive through the energy transition
Building platform to thrive through the energy transition Transaction overview Scope Conditions and timing § Subject to satisfaction of customary § Phase 1, under construction, designed for § All-cash acquisition of OCI Clean 8 conditions precedent including OCI N.V. 1.1 Mtpa ammonia production. It
Slide 6: Advantaged project utilising a proven design
Advantaged project utilising a proven design Located on Texas Gulf Coast in an established energy precinct with immediate access to domestic and export LA markets Driftwood LNG TX OCI Clean Ammonia Project Capital efficient model leveraging close-proximity to third party hydrogen and nitrogen feedst
Slide 7: Capital light structure with locked-in supplier agreements
Capital light structure with locked-in supplier agreements 2,9 10 Third party feedstock Acquisition scope Linde Lower carbon ammonia Nitrogen Air Air separation unit Phase 1 Hydrogen Dock/vessel 1.1 Mtpa ammonia synthesis loading Oxygen § 2x 50,000 tonne ammonia storage tanks § Dock facilities desig
Slide 8: Project 70% complete with expansion optionality
Project 70% complete with expansion optionality Phase 1 to be completed by OCI and includes cost, 4 schedule and facility performance guarantees Significant Phase 1 progress: § Engineering: 99% complete § Procurement: 84% complete (includes 100% of long lead items) § All major mechanical equipment d
Slide 9: Project schedule
Project schedule 2024 2025 2026 Future 2 Phase 1 (1.1 Mtpa) Construction Ammonia production Lower carbon ammonia production Woodside Acquisition Project completion 80% due (closing) and handover targeted for 2025 20% due H and N supply 2 2 Construction H and N supply 2 2 Linde Feedstock Agreement H
Slide 10: Attractive combination of world-class capability
Attractive combination of world-class capability Woodside track record OCI track record Combined capability ~7 Mtpa gross ammonia capacity Strong overlap between customers for 35 years of LNG operations LNG and lower carbon ammonia 16 years of safe and reliable ammonia World-class reliability produc
Slide 11: Global ammonia demand expected to double by 2050
Global ammonia demand expected to double by 2050 14 Global ammonia demand (million tonnes per annum) 500 Existing global market of ~200 Mtpa traded on a blend of spot and medium-term contracts 100% Hydrogen carrier 400 Marine fuel Lower carbon ammonia expected to exceed 250 Mtpa by Power 2050, compr
Slide 12: Positioned to take advantage of carbon pricing schemes
Positioned to take advantage of carbon pricing schemes 15 CBAM carbon cost in 2029 and 2034 at $100/t CO price ($/tonne) 2 2029 2034 (100% CBAM Phase-in) (22.5% CBAM Phase-in) 250 200 Ability to price Increasing carbon costs expected to drive demand for lower relative to 150 unabated ammonia carbon
Slide 13: Project exceeds Woodside's capital allocation targets
Project exceeds Woodside’s capital allocation targets 17 Increasing ammonia price forecasts ($/ tonne) 1,000 S&P lower carbon Argus lower carbon 800 Wood Mackenzie lower Phase 1 expected to deliver IRR above 10%, with payback carbon 600 2 under 10 years Argus unabated 400 200 High confidence in proj
Slide 14: Balance sheet well positioned with strong liquidity
Balance sheet well positioned with strong liquidity Capital management framework Capacity to fund, H1 2024 liquidity of $8.5 billion and gearing of ~13% Special dividends Safe, Dividend Strong reliable policy Investment Share buy-backs Phase 1 expected to be free cash flow accretive and low balance
Slide 15: Material contribution to Woodside's Scope targets
2,6 Material contribution to Woodside’s Scope 3 targets Scope 3 emissions abatement target Scope 3 investment target Emissions abatement target to take FID on new energy Investment target to invest $5 billion in new energy 18,20 products and lower carbon services by 2030, with total products and low
Slide 16: Compelling investment proposition in a decarbonising world
Compelling investment proposition in a decarbonising world 1 Expected >10% IRR and <10-year payback period, exceeding capital allocation framework targets Investment attractiveness 21 Project is forecasted to be free cash flow accretive on a cumulative basis under IEA NZE, APS, and STEPS scenarios t
Slide 17: Acquiring one of the world's first lower carbon ammonia projects
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 fram
Slide 18: Q&A
Q&A
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Slide 20: Key equipment arrived on site and installation progressed
Key equipment arrived on site and installation progressed Syngas Auxiliary Ammonia Start-up compressor boiler converter heater Delivered in May 2024 and Delivered in March 2024 and Delivered in May 2024 and Delivered in May 2024 and installed on site installed on site installed on site installed on
Slide 21: Our strategy is to thrive through the energy transition
Our strategy is to thrive through the energy transition Thrive through the energy transition Goals which drive our strategic direction through a high-quality portfolio, geographically advantaged to meet Providing energy 2 growing LNG demand Creating and through disciplined capital management OPTIMIS
Slide 22: 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 23: Glossary
Glossary $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars Also referred to as ‘absolute’ emissions, gross emissions are emissions before any eligible Gross greenhouse gas emissions 30 units and certificates have been accounted for A$, AUD Australian dollar H Hydr
Slide 24: Glossary
Glossary Net zero emissions are achieved when anthropogenic emissions of greenhouse gases to the Other indirect GHG emissions. Scope 3 is a reporting category that allows for the treatment of all other atmosphere are balanced by anthropogenic removals over a specified period. Where multiple indirect
Slide 25: Head Office
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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