Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — H1 2022 Earnings Presentation
40 slides from Woodside Energy's earnings presentation, Aug 30, 2022
Slide 1: Half-Year Results Briefing 2022
HALF-YEAR RESULTS BRIEFING 2022 30 August 2022 www.woodside.com investor@woodside.com INVESTOR PRESENTATION
Slide 2: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information This presentation has been prepared by Woodside Energy Group Ltd (“Woodside”). By accessing/attending this presentation you agree to be bound by the following conditions. The release, presentation, publication or distribution of this document,
Slide 3: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) XX% XXX cps Notes to petroleum resources estimates (continued) Woodside reports its petroleum resource estimates inclusive of all fuel consumed in operations. For offshore oil projects, the reference point is defined as the outlet of the floati
Slide 4: Strong financial and strategic achievements
DELIVERED VALUE EXECUTED STRATEGY Strong financial and strategic achievements Completed merger with BHP’s petroleum business 414% Underlying net profit after tax $1,819 million 89% Operating cash flow $2,523 million 263% 109 US cps Interim dividend, fully franked Project execution of Scarborough and
Slide 5: Maximising value through operational excellence
Maximising value through operational excellence Production 54.9 MMboe 132% Operating revenue $5,810 million 47% Unit production cost $7.2 per boe 2% LNG reliability 98.3 % 688% Free cash flow1 $2,568 million FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE 116% Realised price $96.4 per boe Increased re
Slide 6: Health and safety
Health and safety One Tier 2 loss of primary containment process safety event; no impact to people or environment Focus on return to leading personal safety performance Implementation of asset-specific safety improvement plans Total recordable injuries (TRI) and total recordable injury rate (TRIR) T
Slide 7: Merger benefits being realised
Merger benefits being realised PORTFOLIO QUALITY CASH GENERATION AND BALANCE SHEET SHAREHOLDER RETURNS AND CAPITAL DISCIPLINE DEVELOPMENT OPTIONALITY ENERGY TRANSITION LEADERSHIP SYNERGIES AND VALUE CREATION Completed merger with BHP’s petroleum business Maintained 80% cash margin from producing ass
Slide 8: Strong market conditions
Strong market conditions Products HY222 HY21 LNG produced $/boe 89.4 40.9 LNG purchased $/boe 139.6 39.2 Pipeline gas $/boe 51.6 16.9 Crude oil and condensate $/boe 113.8 70.8 NGLs $/boe 47.7 59.7 Average realised price $/boe 96.4 44.6 Q1: $44 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q2: $46 Q3: $59 Q4: $90
Slide 9: Largest interim dividend declared since 2014
Largest interim dividend declared since 2014 Interim and final dividend (US cps) Optimising value and shareholder returns Interim dividend payment value of $2.1 billion Reflects strong operational performance, higher realised prices and contribution from the BHPP assets H1 2022
Slide 10: Sangomar Field Development Phase – 63% complete
Sangomar Field Development Phase 1 – 63% complete Final drydock activities for the FPSO conversion activities completed in March 2022 FPSO scheduled to move in Q4 2022 from China to Singapore to complete integration and commissioning Ocean BlackRhino drillship Five of 23 wells drilled and completed
Slide 11: Scarborough targeting first LNG cargo 2026
Scarborough targeting first LNG cargo 2026 Commenced Pluto Train 2 construction works FEED activities for Pluto Train 1 modifications on schedule LNG refrigeration compressor casing nozzle Bechtel construction accommodation village Scarborough subsea xmas trees All major equipment items procured; co
Slide 12: LNG markets are incentivising new global LNG projects
LNG markets are incentivising new global LNG projects as Europe replaces Russian gas Gaseous fuels remain critical to the energy transition with low-risk and reliable sources advantaged Asian LNG demand not expected to peak before mid-2040s1 Woodside is well positioned to supply customers with close
Slide 13: Committed to strong ESG performance
Committed to strong ESG performance Environmental Social Governance Zero significant environmental events Ongoing decommissioning campaigns at Enfield and Balnaves Undertook a range of biodiversity-related research programs in the areas where we are active Increased value of contracts to local and I
Slide 14: Scope 1 and 2 decarbonisation plan underway
Scope 1 and 2 decarbonisation plan underway Reduce our net equity greenhouse gas emissions (Scope 1 & 2) Design out Operate out Offset portfolio 15% by 2025 30% by 2030 Net zero aspiration by 2050 or sooner Net equity emissions reduction targets1 STRATEGY TARGETS PROGRESS Target is for net equity Sc
Slide 15: Investing in new energy and lower carbon services
Investing in new energy and lower carbon services STRATEGY TARGET PROGRESS Individual investment decisions are subject to Woodside’s investment hurdles. Not guidance. Potentially includes both organic and inorganic investment. CCU = Carbon Capture and Utilisation. Capturing greenhouse gases and conv
Slide 16: Financial update
Financial update Graham Tiver | Chief Financial Officer
Slide 17: Optimising value; preparing for major capital expenditure
Optimising value; preparing for major capital expenditure Increased realised prices and contribution from the BHPP assets driving higher revenue and profit Significant operating and free cash flow Balance sheet positioned to support major project expenditure Delivering strong shareholder returns HY2
Slide 18: Increased profit moderated by higher tax expense
Increased profit moderated by higher tax expense Increased royalties and excise due to higher revenue Primarily due to merger transaction costs Higher realised prices across all markers Increased volume due to contribution of BHPP assets and interconnector volumes Derecognition and unwind of the Cor
Slide 19: 414% increase in underlying NPAT
414% increase in underlying NPAT EBIT Operating revenue Underlying NPAT Higher revenue driven by higher realised prices, additional volume from the BHPP assets and the contribution of the Interconnector In addition to higher operating revenue, positive impacts include the sale of Pluto Train 2, offs
Slide 20: Cash generative business through the cycle
Cash generative business through the cycle The BHP merger completion payment is represented in the consolidated statement of cash flows as cash received on acquisition of BHP Petroleum, including cash acquired ($1.082 billion). Cash flow from operating activities less cash flow from investing activi
Slide 21: Production cost
Production cost Includes costs related to the purchase of Pluto feed gas from non-operating JV participants and the tolling of Pluto volumes transported through the Pluto-KGP Interconnector for processing at KGP. Production cost Unit production cost impacted by: Planned major shutdown at Wheatstone
Slide 22: Maintained cash margin above 80%
Maintained cash margin above 80% Cash margin excludes revenue and costs from purchased LNG. Royalties and excise from higher associated revenue Insurance and shipping costs Inclusion of BHPP assets Associated cost with Interconnector Wheatstone shutdown Impact of higher realised prices Strong underl
Slide 23: Tax expense reflects higher realised prices and increased profitability
Tax expense reflects higher realised prices and increased profitability Impacted by higher taxable income Impacted by higher asset profitability Effective statutory income tax rate Increase in oil and gas prices reflected in higher PRRT, royalty and excise expenses Income tax expense increased by 27
Slide 24: Disciplined capital management for future investment
Disciplined capital management for future investment Indicative only, not guidance. Woodside’s estimated capital expenditure for Scarborough, Pluto Train 2 and Sangomar projects from 1 July 2022 to 31 December 2024 at current equity levels. Excludes the benefit of the additional contribution by GIP
Slide 25: Returning value to shareholders
Returning value to shareholders Interim 2022 fully franked dividend of 109 US cents per share ($2.1B): 80% of Woodside’s underlying net profit after tax for H1 2022 $0.6B of the BHP merger completion payment BASED ON UNDERLYING NPAT 1 BHP MERGER COMPLETION PAYMENT 2 Total interim 2022 dividend of $2
Slide 26: Prepared for upcoming capital expenditure phase
Prepared for upcoming capital expenditure phase Balanced debt maturity profile1 Continuing strong liquidity Low portfolio cost of debt (3.6%) 3.6 years portfolio weighted average term to maturity Credit ratings of BBB+ and Baa1 reaffirmed Refinanced and increased an existing committed facility in Ju
Slide 27: Outlook
OUTLOOK Meg O’Neill | Chief Executive Officer
Slide 28: Capital allocation framework
Capital allocation framework CCUS refers to carbon capture utilisation and storage. Payback refers to RFSU + X years. Target is for net equity Scope 1 and 2 emissions. Baseline is set as the gross average equity Scope 1 and 2 emissions over 2016-2020 and may be adjusted (up or down) for potential eq
Slide 29: Clear priorities
Clear priorities CREATE AND PROTECT VALUE OPERATIONS BUILD OUR SUSTAINABLE FUTURE Return to leading personal safety performance Maintain safe, reliable and low-cost operations Advance new energy and CCUS opportunities Drive opportunities to support emissions reduction goals Continue execution of Sca
Slide 30: Annexure
ANNEXURE pear
Slide 31: Minor capital projects
Minor capital projects Redirected offshore fuel gas pipeline to supply additional gas into the eastern Australian domestic gas market Progressing feasibility study for a south-east Australian carbon capture and storage hub Paid back capital investment within first three months of operation Pluto LNG
Slide 32: New segment performance
New segment performance 2,683 194 728 3,095 88 AUSTRALIA INTERNATIONAL MARKETING Pluto LNG, NWS Project, Bass Strait, Wheatstone, Nguijima-Yin, Macedon, Pyrenees and Okha Shenzi, Mad Dog, Ruby/Angostura, Atlantis and Other Trading of LNG (non-produced) and optimisation activities DESCRIPTION EBIT ($
Slide 33: Cash flow reconciliation
Cash flow reconciliation Cash flow from financing ($968 million) Free cash flow $2,568 million Dividends paid (2021 final dividend) Cash flow generated from operations, includes income tax paid Includes Scarborough, Pluto Train 2 and Sangomar expenditure partially offset by additional capital contri
Slide 34: 2022 full-year guidance
2022 full-year guidance Capital and exploration expenditure related to former BHPP assets included from 1 June 2022. Sangomar represents 82% participating interest. Scarborough represents 100% participating interest (from 1 June 2022). Pluto Train 2 represents 51% participating interest. Excludes th
Slide 35: Reserves update
Reserves update Reserves are based on an effective date of 1 June 2022. The percentage increase is from volumes reported in Woodside’s most recent Reserves and Resources Statement, which had an effective date of 31 December 2021. Estimates have been updated for production during the period from 1 Ja
Slide 36: Asset tables
Asset tables Asset Operating revenue $ million EBITDA $ million Depreciation and amortisation $ million EBIT $ million Capital and exploration expenditure $ million Production costs $ million Australia North West Shelf 912 628 170 458 50 60 Pluto 2,058 1,896 384 1,512 117 163 Wheatstone 460 365 128
Slide 37: Realised price
Realised price Products Units H1 20221 H1 2021 Variance % Revenue impact $ million LNG produced2 $/boe 89 41 117 1,428 LNG traded3 $/boe 140 39 259 709 Pipeline gas $/boe 52 17 206 6 Oil and condensate $/boe 114 71 61 339 NGLs $/boe 48 60 (20) - Average realised price $/boe 96 45 113 Average Dated B
Slide 38: Corporate performance
Corporate performance H1 2022 H1 2021 Production volume MMboe 54.9 46.3 Operating revenue $ million 5,810 2,504 EBITDA $ million 3,971 1,496 EBIT $ million 2,982 621 Net finance costs $ million 55 118 Tax expense/(benefit) $ million 1,248 161 Non-controlling interest $ million 39 25 NPAT $ million 1
Slide 39: Glossary
Glossary $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars A$, AUD Australian dollar ASX Australian Securities Exchange 2P Proved plus Probable reserves 2C Best Estimate of Contingent resources Bcf Billion cubic feet BHP Petroleum or BHPP BHP Petroleum Internation
Slide 40: Head Office
Head Office: Woodside Energy Group Ltd Mia Yellagonga 11 Mount Street Perth WA 6000 Postal Address: 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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