Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Woodside Petroleum — Investor Day (November 2019)
55 slides from Woodside Energy's investor day presentation, Nov 19, 2019
Slide 1: ASX Announcement: Investor Briefing Day 2019
ASX Announcement Woodside Petroleum Ltd. ACN 004 898 962 Mia Yellagonga Tuesday, 19 November 2019 11 Mount Street Perth WA 6000 ASX: WPL Australia OTC: WOPEY T +61 8 9348 4000 www.woodside.com.au INVESTOR BRIEFING DAY 2019 The timing is right for Woodside to implement plans to triple its reserves an
Slide 2: Investor Briefing Day 2019
INVESTOR 2019 BRIEFING DAY investor@woodside.com.au
Slide 3: Disclaimer, risks and assumptions
Disclaimer and risks • Our investors and potential investors have requested that Woodside continues to provide further detail and information in respect of Woodside’s overall strategic approach and its potential INTRODUCTION implications for the company. This presentation is a response to those requ
Slide 4: Evacuation route
INTRODUCTION Evacuation route + Follow directions of emergency wardens + Do no use lifts + Leave by the nearest fire exit stairs + Evacuate to the assembly STAGE point, between the International Convention Centre and Darling You are Harbour waterfront here Evacuation route Investor Briefing Day 2019
Slide 5: Welcome
INTRODUCTION OVERVIEW Welcome Peter Coleman, CEO and Managing Director 09:35 – 09:50 DELIVERING VALUE Meg O’Neill, EVP Development 09:50 – 10:20 CAPITAL MANAGEMENT & FINANCIAL RESILIENCE Sherry Duhe, CFO and EVP Commercial 10:20 – 10:40 SUMMARY Peter Coleman 10:40 – 11:00 QUESTION & ANSWER Peter Col
Slide 6: Overview
2019 OVERVIEW
Slide 7: Delivering value
OVERVIEW Creating DELIVERING VALUE growth + Scarborough resource increased by 500 MMboe BASE CAPITAL BUSINESS + Targeting production growth of MANAGEMENT >6% CAGR 2019-20281,2 + Low cost, high margin + Strong balance sheet producer + Portfolio development cost of prepared for growth + Near-term grow
Slide 8: Operational and safety performance, 2019 production guidance
Strong operated LNG reliability1 Improved safety performance OVERVIEW 100% High 1.71 Annual total recordable injury 1.64 75% 1.32 performing 1.29 Reliability base business rate³ 50% 0.79 25% 0% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Oct YTD² Oct YTD 2 Low portfolio unit production cost Na
Slide 9: Delivering significant growth
1 OVERVIEW Staircase of new production 2019-2028 SCARBOROUGH Delivering SANGOMAR BROWSE 1 CAGR >6% significant 150 GREATER PHASE 1 2019-2028 ENFIELD growth MMboe 100 BROWSE 2 MYANMAR A-62 50 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Tripling reserves base 866 3,714 1,462 67 MMboe 1,787 1,2
Slide 10: Technology and operational excellence
OVERVIEW Pluto capacity increased 15% Pluto daily production rate1 Technology + Utilising advanced digital technology 16,000 and 15,000 Tonnes per day + Maximising reliability 14,000 operational + Operational excellence 13,000 excellence 12,000 11,000 2012 2013 2014 2015 2016 2017 2018 2019 Maximum
Slide 11: Resilient major project economics
OVERVIEW COMMON ASSUMPTIONS1 Resilient major project ~$65 RT long term oil price ~$0.70 AUD/USD ~12% LNG slope DCF Valuation method ~$40/tCO 2e Carbon price economics INVESTMENT TARGETS2 >12% >0.25 <8 years IRR VIR 3 Payback 4 MEETS INVESTMENT TARGETS5 Scarborough and Browse to NWS Sangomar Phase 1
Slide 12: Collaboration delivering value
OVERVIEW Collaboration delivering WORLD-CLASS value TECHNOLOGY SUSTAINABLE FUTURE NEW ENERGY Investor Briefing Day 2019 19 November 2019 11
Slide 13: Delivering value
OVERVIEW EXCELLENT BASE COMPELLING Delivering BUSINESS GROWTH value + Experienced low cost, high margin producer + Large, high quality resources + Strong and improving HSE performance + Leveraging existing infrastructure + Sector leading use of technology to + Globally competitive cost of supply max
Slide 14: Delivering Value
2019 DELIVERING VALUE
Slide 15: Burrup Hub
DELIVERING VALUE Burrup Hub + Targeted production approximately 40 Tcf1 BROWSE TO + Scarborough and SCARBOROUGH NWS PROJECT Pluto Train 2 + 11.1 Tcf dry gas2 KARRATHA PLUTO LNG GAS PLANT + 5 Mtpa of LNG through Pluto Train 23 + Browse to NWS Project + 13.9 Tcf dry gas2 PLUTO-KGP INTERCONNECTOR + 390
Slide 16: Pluto LNG reliability
DELIVERING VALUE LNG reliability Pluto LNG 100% Record production rates 75% Reliability 50% + First major turnaround complete 25% + New record daily production rates after the turnaround 0% 2015 2016 2017 2018 2019 + Pluto-KGP Interconnector tie-ins Oct YTD¹, 2 installed 8.0 LNG unit production cost
Slide 17: North West Shelf Project reliability
DELIVERING VALUE LNG plant performance North West Investing in the future 100% Shelf Project 75% Reliability 50% + Keeping the plant full 25% + GWF-3 targeting FID in Q1 2020 + Goodwyn platform process upgrades 0% 2015 2016 2017 2018 2019 Oct YTD¹ + Ready for the future LNG unit production cost + Ef
Slide 18: Australia Oil and Wheatstone
DELIVERING VALUE Ngujima-Yin monthly production exceeding plan Australia Oil Outstanding execution 1.5 and + Greater Enfield 1.2 Wheatstone + Delivered on schedule and under budget 0.9 MMboe + Over five million work hours completed in 0.6 shipyard without a recordable injury 0.3 + 1.15 MMbbl produce
Slide 19: Scarborough: achievements since February 2018
Achievements since February 2018 DELIVERING VALUE Scarborough INCREASED RESOURCE 52% 11.1 Delivering Scarborough resource (2C, 100%)1 trillion cubic feet value INCREASED CAPACITY Pluto Train 2 capacity1 52% 5.0 million tonnes per annum PRESERVED COMPETITIVE COSTS ($ NOMINAL) Estimated project cost (
Slide 20: Scarborough resource increased by 52%
DELIVERING VALUE Scarborough 670 MMboe increase 1 Resource increased by 52%1 1.5 11.1 + Systematic review and evaluation Resource of complete subsurface data set 2.3 increased by (1979-2012) 7.3 52% + Full waveform inversion (FWI) seismic data reprocessing + Integration of core, well, regional geolo
Slide 21: Significantly increased recoverable resource
Significantly increased recoverable resource DELIVERING VALUE 1 Scarborough Net pay thickness: legacy analysis Net pay thickness: 2019 Woodside analysis Increased resource by NSc-1 52% NSc-1 Sc-4A Sc-4A 3 m contour 3 m contour Sc-1 Sc-1 Sc-2 Sc-2 Sc-5 Sc-3 Sc-5 Sc-3 0 5 10 15km 0 5 10 15km Investor
Slide 22: Scarborough resource increase: logs and saturation
Interpreted Logs SCARBOROUGH-4A Saturation height function DELIVERING VALUE Shale Gas Volume Saturation 100 Scarborough 80 HAFWL (m)1 60 40 20 + Higher sand volumes Increased 0 measured in the well logs resource by 0 0.5 Water saturation (fraction) 1 + Increased gas saturations throughout the column
Slide 23: Pluto Train 2
DELIVERING VALUE Pluto Train 2 + 5.0 Mtpa Train 2 optimised for Scarborough + Avoids ~$4B cost by sharing infrastructure with Train 11 + Existing LNG storage and loading systems support Train 2 + Train 2 site prepared as part of foundation project Investor Briefing Day 2019 Conceptual image, not to
Slide 24: Scarborough cost update
DELIVERING VALUE Project costs significantly de-risked Pluto expansion (onshore) scope Scarborough $6.1B + Pluto Train 2 + FEED being finalised by Bechtel + Competitive lump sum proposal for EPC received Cost update + Pluto LNG modifications FEED contract awarded to KBR Scarborough (offshore) scope
Slide 25: Scarborough: strong market support
DELIVERING VALUE Scarborough Strong market support LNG marketing well advanced Pipeline gas marketing complete FID sales on 2.4 4.9 125 track 112.5 50% of 1.0 available LNG volume 1.0 TJ/day 0.5 Mtpa 1 2 3 5 Pertamina SPA ENN HOA Uniper HOA Opportunity Scarborough Perdaman sale Scarborough equity pi
Slide 26: Scarborough: clear path to FID
DELIVERING VALUE Scarborough TECHNICAL Engineering work to support execution Scarborough resource increase Toll price agreed1 Clear path to COMMERCIAL Finalising binding tolling agreement FID (early 2020) H1 2020 FID FEED contracts with EPC options CONSTRUCTION Long lead items ordered Experienced, h
Slide 27: Pluto-KGP Interconnector
DELIVERING VALUE OPTIMISATION and ACCELERATED REVENUE Pluto-KGP Interconnector + Connects Pluto LNG and Karratha Gas Plant + Maximises utilisation of the Burrup Hub + Optionality for processing other gas resources + Interconnector capacity >5 Mtpa + Up to 1.5 Mtpa prior to Browse start-up1 + Pluto a
Slide 28: Browse to NWS Project
DELIVERING VALUE Browse to KARRATHA GAS PLANT NWS Project + 10 Mtpa LNG production1 + 13.9 Tcf of dry gas and 390 MMbbl of condensate2 + Gas composition consistent with NWS process + Phased offshore development managing capital expenditure and risk + Capital efficient development utilising emerging
Slide 29: Browse to NWS Project: FEED ready
DELIVERING VALUE Browse to + Pre-FEED engineering commenced NWS Project FPSOs + FEED engineering contract ready to award + Advanced engagement with top tier engineering and construction contractors FEED ready + Concept definition engineering complete TRUNKLINE + Geotechnical, geophysical and environ
Slide 30: Browse to NWS: clear path to FID
DELIVERING VALUE Browse to Pre-FEED engineering commenced NWS TECHNICAL Joint studies between Browse and NWS on gas 2019 processing FEED READY Preliminary tolling agreement Clear path to COMMERCIAL Toll price Binding gas processing agreement FEED CONSTRUCTION Preliminary costs within previous estima
Slide 31: Sangomar Phase 1
DELIVERING VALUE Sangomar Phase 1 + Phase 1 + 230 MMbbl (100% recoverable)1 + FPSO capacity 100,000 bbl/d 1 + 23 wells comprising production, gas and water injectors + Water depth 800-1,100m + Potential future phases + Additional oil production (phases 2 and 3) + Gas production and transport to shor
Slide 32: Sangomar Phase 1: delivering early cash flow
DELIVERING VALUE Sangomar COST UPDATE + Phase 1: $4.2B, including FPSO purchase (reducing opex)1 Phase 1 + Pricing secured ahead of current market escalation + Short development timeline Delivering + Short payback period with significant upside early cash flow STRATEGIC FIT + Early revenue supports
Slide 33: Sangomar Phase 1: FID by year end
DELIVERING VALUE Sangomar Phase 1 TECHNICAL FEED engineering Technical and integrated assurance review FID by year COMMERCIAL Joint venture funding plans prepared 2019 FID 1 end Drill rig and services contract awarded2 CONSTRUCTION Subsea development contract awarded FPSO EPC contract awarded Early
Slide 34: Myanmar A-6 Development
DELIVERING VALUE Myanmar A-6 Development YANGON RISER PLATFORM + Potential development concept: ~50m water depth PIPELINE TO + 6 wells in Phase 1 at ~2,300m water depth1 YANGON + 2019 progress + Concept selection and definition studies + Commerciality assessment ongoing + 2020 activities + Enter FEE
Slide 35: Track record: capability to deliver
DELIVERING VALUE Track Record ‘Best in basin’ drilling performance for Greater Enfield Capability to 35 30 + GWF-2 delivered six months ahead of deliver Days/1,000m schedule, $630 million under budget1 25 20 + Greater Enfield Project delivered on schedule 15 and under budget 10 + Delivered the $1B P
Slide 36: Proactive emissions management
DELIVERING VALUE Proactive + 5% energy efficiency improvement target 2016-2020 emissions DESIGN OUT + New 5% energy efficiency improvement target 2021-2025 and management OPERATE OUT + Signatory to the Zero Routine Flaring Initiative and Methane Guiding Principles + >0.5 Mt CO2 offset since 2008 by
Slide 37: Summary
DELIVERING VALUE Summary STRONG BASE BUSINESS VALUE CREATING DEVELOPMENTS DE-RISKING EXECUTION PROACTIVE EMISSIONS MANAGEMENT CAPABILITY TO DELIVER Investor Briefing Day 2019 19 November 2019 36
Slide 38: Capital Management
2019 CAPITAL MANAGEMENT
Slide 39: Enabling value creation
CAPITAL MANAGEMENT POTENTIAL VALUE Enabling value Development opportunities Organic growth Acquisitions creation INVESTMENT VALUE MAXIMISATION Operating cashflow Participating Shareholder Equity Debt interest returns management FINANCIAL RESILIENCE DELIVERED VALUE Dividend Total shareholder Share bu
Slide 40: Investing in growth
CAPITAL MANAGEMENT Capital investment profile Investing in 5 growth 4 + Scarborough (current interest)1 Scarborough (target interest)2 3 Myanmar A-63 $B Sangomar Phase 1 2 Browse to NWS Project Base business 1 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 + Target gearing 15 - 35% + Dividend: + Pol
Slide 41: Resilient operating cashflows
CAPITAL MANAGEMENT 1 Peer leading EBITDA margin Resilient Operating revenue $5,240million operating FY2018 Woodside cashflows Free cash flow $1,524million FY2018 Gross margin 50 % FY2018 0 20 40 60 80 VALUE % Cashflow LNG unit production cost 2 Debt PI Returns Equity ~$3.5-4.0boe Source: Bloomberg F
Slide 42: Revenue stability >$1B p.a.
CAPITAL MANAGEMENT Revenue Protecting near-term revenue Longer-term diversified revenue stability 2020 portfolio contract composition 100% Gross tolling revenue 75% >$1B p.a. from 2027 1 50% + Toll revenue from + NWS Project 25% + Pluto LNG VALUE Cashflow 0% 2018 2019 2020E Debt PI Returns Equity Lo
Slide 43: Diversified debt profile
CAPITAL MANAGEMENT Debt maturity profile1 Access to debt1 Diversified debt profile 1,600 14 Bank bilateral 12 market 1,200 $ million Number of facilities 10 US RegS/144A 800 8 bond market 6 Asia 400 syndicated Medium market 4 Term Notes 0 2 JBIC Size of bubble = size of facility 0 0 2 4 6 8 Fixed Fl
Slide 44: Participating interest and equity management
CAPITAL MANAGEMENT Participating interest and + Targeting 50% participating interest in Pluto Train 2 equity PARTICIPATING + Reviewing Scarborough participating interest given increased INTEREST resource value + Ownership levels regularly reviewed throughout project life + Successful reinstatement o
Slide 45: Peer-leading yield reinforcing value
CAPITAL MANAGEMENT Peer-leading Dividend yield Woodside vs. peers1 Strong long-term yield Woodside performance reinforcing value Historical dividend yield (net)4 16 12 8 % 4 0 2015 2016 2017 2018 2019 VALUE Woodside - net – tax impact Woodside Oil and gas oil Australian peers and gas peers2 Cashflow
Slide 46: Summary
2019 SUMMARY
Slide 47: Project metrics
SUMMARY SCARBOROUGH BROWSE TO SANGOMAR AND PLUTO MYANMAR A-6 NWS PROJECT PHASE 1 Project Based on current equity positions. All numbers Woodside share. TRAIN 2 metrics Resource1 1,462 MMboe 866 MMboe 81 MMboe2 67 MMboe3 LNG 6.5 Mtpa 10 Mtpa Capacity4 Pipeline gas 1.0 Mtpa 1.4 Mtpa Liquids 60 kbpd 10
Slide 48: World-class culture
SUMMARY World-class 50:50 culture DIVERSE Gender-balanced graduate intake AND INCLUSIVE 3.6 % 31.9 % Indigenous Australian Female workforce, well above workforce resource sector average A$17.7 million 11,000 Global voluntary social Employee hours volunteered HIGH investment programs PERFORMING Safet
Slide 49: Delivering sustained value
SUMMARY Delivering sustained WORLD-CLASS OPERATIONS value SUSTAINABLE FUTURE HIGH QUALITY BALANCE SHEET >6% CAGR PRODUCTION GROWTH TRIPLING DEVELOPED RESERVES Investor Briefing Day 2019 19 November 2019 48
Slide 50: Question & Answer
2019 QUESTION & ANSWER
Slide 51: Appendix
2019 APPENDIX
Slide 52: Delivering the strategy: three horizons
APPENDIX HORIZONI I HORIZON 2017–2021 2017–2021 Delivering the CASH GENERATION strategy Lower capital intensity developments New growth platforms through OUTSTANDING BASE BUSINESS New revenue streams exploration and acquisitions Expanding the LNG market SUSTAINABLE ENERGY Preparing for Hor
Slide 53: Notes to petroleum resources estimates
APPENDIX 1. Unless otherwise stated, all petroleum resource estimates are quoted as at the balance date (i.e. 31 December) of the Reserves Notes to Statement in Woodside’s most recent Annual Report released to ASX and available at https://www.woodside.com.au/news-and- media/announcements, net Woodsi
Slide 54: Glossary
APPENDIX kt Kilotonnes (metric) Glossary $, $m, $B US dollars unless otherwise stated, millions of dollars, billions of dollars LNG Liquefied natural gas A$ Australian dollars LPG Liquefied petroleum gas 2P Proved plus Probable reserves MMbbl Million barrels 2C Best Estimate of Contingent Resources
Slide 55: Woodside Petroleum Ltd contact details
Woodside Petroleum Ltd Mia Yellagonga T: +61 8 9348 4000 11 Mount Street F: +61 8 9214 2777 Perth WA 6000 E: companyinfo@woodside.com.au GPO Box D188 woodside.com.au Perth, WA 6840 Australia