Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Investor Day (December 2022)
73 slides from Woodside Energy's investor day presentation, Dec 1, 2022
Slide 1: Investor Briefing Day 2022 announcement
Woodside Energy Group Ltd ACN 004 898 962 Mia Yellagonga 11 Mount Street For personal use only Perth WA 6000 Australia T +61 8 9348 4000 www.woodside.com ASX: WDS NYSE: WDS LSE: WDS Announcement Thursday, 1 December 2022 INVESTOR BRIEFING DAY 2022 Woodside Energy CEO Meg O’Neill today outlined the c
Slide 2: Announcement (continued)
“Woodside will continue to apply our clear capital allocation framework as we assess our opportunities in both conventional and new energy, all of which must support our net equity emissions reduction targets and commitments to shareholders. “Woodside’s customer-led, scalable approach to investing o
Slide 3: Forward looking statements
Forward looking statements This presentation contains forward-looking statements with respect to Woodside’s business and operations, market conditions, results of operations and financial condition, including, for example, but not limited to, statements about expectations regarding long-term demand
Slide 4: Investor Briefing Day 2022
For personal use only INVESTOR BRIEFING DAY 2022 1 December 2022 www.woodside.com investor@woodside.com
Slide 5: Welcome
For personal use only WELCOME Matthew Turnbull Vice President Investor Relations
Slide 6: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information expectations regarding long-term demand for Woodside’s products, timing of completion of Woodside’s projects, • This presentation has been prepared by Woodside Energy Group Ltd (“Woodside”). By accessing/attending this expected synergies from t
Slide 7: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) Notes to petroleum resource estimates (continued) subsidiaries or Woodside Energy Group Ltd and its applicable subsidiaries (as the context requires). For personal use only 4. Woodside reports its petroleum resource estimates inclusive of all f
Slide 8: Evacuation route
Evacuation route For personal use only Follow directions of emergency wardens Do not use lifts Leave by the nearest fire exit stairs Evacuate to an assembly point, north of Crown Sydney at the Barangaroo Reserve, or south of Crown Sydney at the Barangaroo Wharf Promenade 5
Slide 9: Introduction and welcome
Introduction and welcome Overview Meg O’Neill, CEO and Managing Director For personal use only Finance Graham Tiver, CFO and Executive Vice President Marketing and trading Mark Abbotsford, Executive Vice President Marketing and Trading Projects Matthew Ridolfi, Executive Vice President Projects Aust
Slide 10: Overview
For personal use only OVERVIEW Meg O’Neill Chief Executive Officer and Managing Director
Slide 11: The investment case – a global energy supplier
The investment case – a global energy supplier For personal use only HIGH QUALITY DISCIPLINED CAPITAL POSITIONED FOR THE PORTFOLIO MANAGEMENT ENERGY TRANSITION Scale, diversification and resilience Framework established to optimise value Agile, flexible and adaptable as the to deliver enduring value
Slide 12: Strongly positioned business
Strongly positioned business 1 STRONG MARGIN 2 HIGH DIVIDEND YIELD 3 GAS WEIGHTED For personal use only EBITDA margin (%)1 Last twelve months yield (%)2 % gas in portfolio3 10 90 100 75 60 5 50 30 25 0 0 0 Distinctive combination of strong margin, high dividend yield and gas weighting Dataset: Woods
Slide 13: Production growth supported by projects in execution
Production growth supported by projects in execution For personal use only Production profile with sanctioned projects (MMboe)1 >4% compound annual growth rate (CAGR) from Subsea Scarborough 2023 to 20271 250 Shenzi tie-back projects Sangomar North Future opportunities Mad Dog include Trion, Calypso
Slide 14: Our products enable a stable energy transition
Our products enable a stable energy transition For personal use only ENERGY AFFORDABILITY Affordability is required for energy equity and a stable energy transition ENERGY RELIABILTY Secure, reliable energy is essential for economic growth and developing economies Gas provides electricity grids with
Slide 15: Economic growth driving energy demand
Economic growth driving energy demand World population (billion)2 World real GDP ($ trillion)3 For personal use only 10 250 8 200 6 150 Global GDP expected to almost double by 2050 and global population growth is forecast to continue 4 100 2 50 History Forecast History Forecast Non-OECD energy deman
Slide 16: Resilient hydrocarbon demand in a range of scenarios
Resilient hydrocarbon demand in a range of scenarios Oil demand (EJ)2 Natural gas demand (EJ)2 For personal use only 400 400 300 300 STEPS Demand for oil and natural gas expected to remain 200 200 STEPS strong to 2050+ 100 APS 100 APS NZE NZE 0 0 Delivering IEA’s Announced Pledges scenario (APS) 202
Slide 17: Natural gas is important for economic progress
Natural gas is important for economic progress Global oil and gas pricing disrupted post Ukraine1 For personal use only (Indexed to September 2020 at 100) Ukraine crisis has disrupted global markets, 2,500 highlighting the importance of energy security and affordability 2,000 1,500 Global markets al
Slide 18: Strategy to thrive through the energy transition
Strategy to thrive through the energy transition PROFITABLE For personal use only High cash generation Robust investment decisions LOWER CARBON RESILIENT Targeted 30% reduction in net equity Strong balance sheet Scope 1 and 2 emissions by 2030 1 Resilient across a range of New energy projects and po
Slide 19: Global, competitively-positioned portfolio
Global, competitively-positioned portfolio For personal use only Diversified Geographically Conventional Emerging new PORTFOLIO BENEFITS product mix diverse production Long-life assets energy business Diversified sources of production1 Senegal Sangomar East coast US Gulf of Caribbean Western Austral
Slide 20: Disciplined capital allocation
Disciplined capital allocation For personal use only OIL GAS NEW ENERGY OFFSHORE PIPELINE LNG DIVERSIFIED Generate high returns to fund New energy products and lower Leveraging infrastructure to monetise undeveloped FOCUS diversified growth, focusing on gas, including optionality for hydrogen carbon
Slide 21: Opportunities across multiple energy sources
Opportunities across multiple energy sources OIL GAS NEW For personal use only ENERGY Hydrogen opportunities include H2OK, Sangomar Phase 1 targeting first oil H2Perth, H2TAS, Southern Green Scarborough development underway late 2023 Hydrogen (SGH) Future growth opportunities include Trion targeting
Slide 22: Merger benefits being realised
Merger benefits being realised For personal use only Cash generation Shareholder Development Energy transition Synergies and MERGER BENEFITS Portfolio quality and balance returns and optionality leadership value creation sheet capital discipline Example synergy opportunities Implemented initiatives
Slide 23: Investing in emissions reduction
Investing in emissions reduction 10% net emissions reduction achieved to 20212 For personal use only SCOPE 1 AND 2 15% 30% Net zero Targets extended to merged portfolio by 2025 by 2030 aspiration by 2050 or sooner Investing ~$500 million in asset decarbonisation Reducing our net equity greenhouse ga
Slide 24: A focus on sustainability and ESG issues
A focus on sustainability and ESG issues For personal use only ENVIRONMENTAL SOCIAL GOVERNANCE Climate resilience and First Nations cultural heritage and Health, safety and wellbeing transition engagement Corporate governance TOPICS Decommissioning Human rights Cybersecurity Environment People and c
Slide 25: Finance
For personal use only FINANCE Graham Tiver Chief Financial Officer and Executive Vice President
Slide 26: Capital management optimising shareholder growth and returns
Capital management optimising shareholder growth and returns For personal use only 1 2 3 Well positioned for major Resilient through the Capital management supports capital investment through price cycle strong dividends and growth 2023 and 2024 Special dividends Safe, reliable Dividend Investment S
Slide 27: Liquidity capacity for major capital investment and shareholder returns
Liquidity capacity for major capital investment and shareholder returns For personal use only Continuing strong liquidity 9.4 7.0 6.7 6.1 Undrawn facilities $ billion Strong liquidity supported by cash generation 3.9 Cash Liquidity Undrawn debt facilities of $4.1 billion 2018 2019 2020 2021 31-Oct-2
Slide 28: Investing in growth
Investing in growth Forecast capital expenditure – committed activities ($ billion)1 For personal use only 7 Sangomar 6 5 Scarborough 4 2023 capital expenditure guidance of $6.0-6.5 billion 3 GoM & 2 Caribbean 2 2 Australia, Investing in Woodside’s future production 1 Corporate3 & Other 3 0 2022 202
Slide 29: Resilient cash flows
Resilient cash flows Operating cash flow1 For personal use only 10 8 6 $ billion 4 Resilient cash flow profile supported by portfolio of 2 operational assets 0 2022 2023 2024 2025 2026 2027 Cash flow supports funding of projects under construction and shareholder returns Free cash flow1,2 8 Approxim
Slide 30: Returning value to shareholders
Returning value to shareholders For personal use only Dividends paid1 (US cps) 160 94% 100% 80% 90% 79% 81% 80% 80% 120 Balance sheet positioned to deliver growth and returns 70% 91 60% 80 105 50% History of strong shareholder returns 55 40% 109 30% 214 US cents per share of fully franked dividends
Slide 31: Marketing and Trading
For personal use only MARKETING AND TRADING Mark Abbotsford Executive Vice President Marketing and Trading
Slide 32: Customer-led and value-led marketing strategy
Customer-led and value-led marketing strategy For personal use only BUILDING SCALE ADAPTABLE, RESILIENT FOCUS ON CUSTOMERS AND FLEXIBILITY IN AND RESPONSIVE TO AND THE ENERGY PORTFOLIO MARKET CHANGES TRANSITION Contract portfolio and price mix that balances exposure to upside and revenue Positioning
Slide 33: Increasing price index diversification and gas hub exposure
Increasing price index diversification and gas hub exposure Near-term (2023-2025) For personal use only • Leverage flexibility in base portfolio of oil-indexed sales to access Produced total portfolio1 upside through optimisation ~20% ~70% ~10% • Retain share of uncommitted production to de-risk ope
Slide 34: Increasing gas supply for Australian energy market needs
Increasing gas supply for Australian energy market needs Western Australia For personal use only • LNG plants operate within WA’s domestic gas reservation policy ~18% Woodside market share1 East coast Australia • Portfolio of gas supply sources delivered to a diverse customer Bass Strait base at lar
Slide 35: Projects
For personal use only PROJECTS Matthew Ridolfi Executive Vice President Projects
Slide 36: Outstanding project delivery, benefiting from increased scale
Outstanding project delivery, benefiting from increased scale For personal use only Zero lost time injuries or high-consequence work related injuries SAFE Applying technology to reduce safety hazards and optimise day to day operations Increased scale enables improved contracting efficiency LOW COST
Slide 37: Pipeline of conventional opportunities
Pipeline of conventional opportunities OIL GAS For personal use only Sunrise Browse UNSANCTIONED Atlantis Shenzi opportunities opportunities Calypso DEVELOPMENTS Mad Dog opportunities Western Australian opportunities Bass Strait Trion opportunities Mad Dog Bass Strait Pluto Train 2 Phase 2 Kipper Et
Slide 38: Sangomar Phase 1 – 72% complete, targeting first oil late 2023
Sangomar Phase 1 – 72% complete, targeting first oil late 2023 For personal use only • Second rig in operation since July 2022 Drilling • 6 out of 23 development wells completed • On schedule with strong batch drilling performance Hull conversion FPSO • Conversion, topsides and turret fabrication co
Slide 39: Scarborough – 23% complete, targeting first LNG cargo 2026
Scarborough – 23% complete, targeting first LNG cargo 2026 For personal use only • Site construction works started and progressing safely Pluto LNG • Construction accommodation village in Karratha is operational onshore • Train 1 modifications contractor selection targeted for H1 2023 • Trunkline tr
Slide 40: Managing risk
Managing risk For personal use only SANGOMAR SCARBOROUGH Project contracting strategy has helped mitigate inflation Project execution is well advanced; significant cost has INFLATIONARY Strategy of locking in costs early where possible and utilising been de-risked lump sum contracts Early market eng
Slide 41: Trion – progressing towards investment decision in 2023
Trion – progressing towards investment decision in 2023 For personal use only Generates near-term cashflow STRATEGIC ALIGNMENT Value accretive investment Competitive development cost with quick payback Material resource with ~500 million barrels of 2C contingent resource1 (gross) ROBUST PLAN Trion i
Slide 42: Trion – mature development concept provides execution flexibility
Trion – mature development concept provides execution flexibility 1 Floating facilities For personal use only • Semi-submersible floating production unit with capacity of 100 kbbl/d oil • Storage and offloading provided by separate vessel • 12.6 kg CO2-e/boe emissions, benchmarks below industry aver
Slide 43: Trion – clear path to final investment decision
Trion – clear path to final investment decision For personal use only Subsurface characterisation TECHNICAL Engineering work to support execution Emissions reduction through design and operating philosophy High quality and experienced contractors engaged for major scopes CONTRACTING Major scope of w
Slide 44: Australian Operations
For personal use only AUSTRALIAN OPERATIONS Breyden Lonnie Vice President North West Shelf
Slide 45: Safe, low cost and lower carbon Australian operations
Safe, low cost and lower carbon Australian operations Western Australia Pluto | North West Shelf | Pyrenees | Macedon | For personal use only Wheatstone | Julimar-Brunello | Ngujima-Yin | Okha Implementing area-specific safety improvement plans SAFE Net production1 (kboe/d) Remaining resources2 (MMb
Slide 46: Maximising value from existing assets
Maximising value from existing assets For personal use only Strong operational performance Production (MMboe)1 • Continuously optimising production and challenging current and future 250 production constraints Woodside total • Maintaining high facility reliability 200 Scarborough Nearfield and infil
Slide 47: Asset decarbonisation plans
Asset decarbonisation plans For personal use only Asset decarbonisation plan potential impacts1 (Heritage Woodside assets only) 5 Design out Asset decarbonisation plans have identified 4 Operate out Scope 1 and 2 emissions (Mtpa CO2-e) opportunities for up to 300 kt in potential emissions reductions
Slide 48: Committed to responsible decommissioning
Committed to responsible decommissioning For personal use only Indicative Australian Operations cumulative decommissioning spend ($ billion)1 Enfield and Balnaves well plug and abandonment (P&A) campaign in progress 1.5 Bass Strait ongoing well P&A campaign and progressing approvals and planning for
Slide 49: International Operations
For personal use only INTERNATIONAL OPERATIONS Shiva McMahon Executive Vice President International Operations
Slide 50: Safe, low cost and lower carbon international operations
Safe, low cost and lower carbon international operations Gulf of Mexico Shenzi | Mad Dog | Atlantis For personal use only Net production2 (kboe/d) Remaining resources3 (MMboe) Mature process and personal safety approach, driven by field SAFE leadership and active contractor involvement 55 972 Demons
Slide 51: Gulf of Mexico
Gulf of Mexico Shenzi Atlantis Mad Dog For personal use only First oil: 2009 First oil: 2007 First oil: 2005 Working interest: 72% Working interest: 44% Working interest: 23.9% Houston Current production: 29 kboe/d1 Current production: 16 kboe/d1 Current production: 10 kboe/d1 Shenzi Mad Dog Atlanti
Slide 52: Maximising value of existing assets
Maximising value of existing assets For personal use only Gulf of Mexico Production (MMboe)1 • Mad Dog Phase 2 expected online 2023 250 Woodside • Track record of executing profitable projects total • Subsea multi phase pump and operational optimisation 200 • Infill drilling and side tracks to maint
Slide 53: High return future growth options in the Gulf of Mexico
High return future growth options in the Gulf of Mexico For personal use only Average IRR for unsanctioned growth options (%)1 30% Infill activities informed by ocean bottom node seismic 20% Leveraging existing facilities ~200 MMboe net 2C contingent resources 10% converted to 2P over last five year
Slide 54: Exploration and Development
For personal use only EXPLORATION AND DEVELOPMENT Andy Drummond Executive Vice President Exploration and Development
Slide 55: Exploration
Exploration For personal use only Risk management Value focus Value-focused portfolio to generate low cost, lower carbon development opportunities Characterise the subsurface and Fast commercialisation commercial elements Efficient execution High return options near existing infrastructure Leverage
Slide 56: Calypso – development
Calypso – development For personal use only Concept and resource • 3.2 Tcf gross 2C contingent resource with additional unpenetrated potential1 Barbados • ~250 km to southeast coastline in Trinidad • Development concept screening is currently ongoing Barbados explorations licences Strategic fit Caly
Slide 57: Browse – development
Browse – development For personal use only Concept and resource • 14.6 Tcf of gas and 412 MMbbl condensate (gross contingent resource, 2C)1 • Two FPSO facilities delivering ~11.4 Mtpa of LNG/LPG and domestic gas • ~900 km pipeline to existing NWS project infrastructure Greater Browse Strategic fit •
Slide 58: Sunrise – development
Sunrise – development For personal use only Concept and resource • 5.3 Tcf (dry gas) and 226 MMbbl condensate (gross contingent resource, 2C)1 • Development concept screening in progress Timor - Leste Strategic fit Greater Indonesia Sunrise • Large resource with multiple development options • LNG op
Slide 59: New Energy
For personal use only NEW ENERGY Shaun Gregory Executive Vice President New Energy
Slide 60: Executing our new energy and lower carbon services strategy
Executing our new energy and lower carbon services strategy For personal use only CUSTOMER NEW ENERGY INTEGRATED CARBON COLLABORATION SOLUTIONS Working with customers to develop Targeting hydrogen and ammonia production Developing solutions to help decarbonise demand for new sources of energy levera
Slide 61: Integrated carbon solutions
Integrated carbon solutions CARBON MANAGEMENT Develop integrated carbon solutions to help our hydrocarbon business, new energy business and For personal use only STRATEGY our customers CARBON CAPTURE AND OFFSETS CARBON TO PRODUCTS STORAGE (CCS) Originate high integrity offset units and Secure and ac
Slide 62: Hydrogen and ammonia solutions
Hydrogen and ammonia solutions HYDROGEN AND Develop solutions and pursue technologies to assist our customers with their For personal use only AMMONIA STRATEGY decarbonisation pathways HEAVY DUTY POWER SHIPPING AND INDUSTRIALS AND TRANSPORT MARINE FUELS CHEMICALS Decarbonisation of coal-fired Provid
Slide 63: A portfolio of new energy opportunities
A portfolio of new energy opportunities Woodside Solar For personal use only Proposed solar facility that could supply up to 100 MW to Pluto and other customers located near Karratha in Western Australia, with the potential to expand this facility to up to 500 MW as customer demand arises in the fut
Slide 64: H2OK progressing towards FID
H2OK progressing towards FID For personal use only Completed detailed geotechnical investigations TECHNICAL FEED activities underway Electrolysis equipment supply contract awarded in October 2022 Execute agreements for power and water supply CONTRACTING Award contract for liquification equipment su
Slide 65: New energy value chain
New energy value chain For personal use only Power generation Processing, Liquids marketing Customers electrolysis + liquefaction Segments of the value chain Advantaged locations Key advantages and growth Large scale Power Strong global liquids Years of strong processing and catalysts for Woodside’s
Slide 66: Close
For personal use only CLOSE Meg O’Neill Chief Executive Officer and Managing Director
Slide 67: The investment case – a global energy supplier
The investment case – a global energy supplier For personal use only HIGH QUALITY DISCIPLINED CAPITAL POSITIONED FOR THE PORTFOLIO MANAGEMENT ENERGY TRANSITION Scale, diversification and resilience Framework established to optimise value Agile, flexible and adaptable as the to deliver enduring value
Slide 68: Break
For personal use only BREAK
Slide 69: Question and Answer
For personal use only QUESTION AND ANSWER
Slide 70: Appendix
For personal use only APPENDIX
Slide 71: Glossary
Glossary Calculated as a profit before income tax, PRRT, net finance costs, depreciation and $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars EBITDAX amortisation, impairment and exploration and evaluation expense A$, AUD Australian dollar Woodside sets its Scope
Slide 72: Glossary (continued)
Glossary Woodside has set its Scope 1 and 2 greenhouse gas emissions reduction targets on a net PRRT Petroleum resource rent tax Net greenhouse basis, allowing for both direct emissions reductions from its operations and emissions gas emissions reductions achieved from the use of offsets. Net greenh
Slide 73: Head Office
For personal use only 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