Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Investor Day (December 2022)
70 slides from Woodside Energy's investor day presentation, Dec 1, 2022
Slide 1: Investor Briefing Day 2022
INVESTOR BRIEFING DAY 2022 1 December 2022 www.woodside.com investor@woodside.com
Slide 2: Welcome
WELCOME Matthew Turnbull Vice President Investor Relations
Slide 3: 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, expected synergies from the BHP Petroleum merger, expectations regarding future capital expenditures, the payment of • This presentati
Slide 4: 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). 4. Woodside reports its petroleum resource estimates inclusive of all fuel consumed in operat
Slide 5: Evacuation route
Evacuation route 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 6: Introduction and welcome
Introduction and welcome Overview Meg O’Neill, CEO and Managing Director Graham Tiver, CFO and Executive Vice President Finance Marketing and trading Mark Abbotsford, Executive Vice President Marketing and Trading Matthew Ridolfi, Executive Vice President Projects Projects Breyden Lonnie, Vice Presi
Slide 7: Overview
OVERVIEW Meg O’Neill Chief Executive Officer and Managing Director
Slide 8: The investment case – a global energy supplier
The investment case – a global energy supplier DISCIPLINED CAPITAL HIGH QUALITY POSITIONED FOR THE MANAGEMENT PORTFOLIO ENERGY TRANSITION Framework established to optimise value Agile, flexible and adaptable as the Scale, diversification and resilience and shareholder returns world’s energy mix evol
Slide 9: Strongly positioned business
Strongly positioned business 3 1 2 GAS WEIGHTED STRONG MARGIN HIGH DIVIDEND YIELD 2 3 1 Last twelve months yield (%) % gas in portfolio EBITDA margin (%) 10 90 100 75 60 5 50 30 25 0 0 0 Distinctive combination of strong margin, high dividend yield and gas weighting Dataset: Woodside Energy, Apache,
Slide 10: Production growth supported by projects in execution
Production growth supported by projects in execution 1 Production profile with sanctioned projects (MMboe) >4% compound annual growth rate (CAGR) from Scarborough Subsea 1 tie-back 250 2023 to 2027 Shenzi projects North Sangomar Future opportunities Mad Dog include Trion, Calypso, BHP Phase 2 Browse
Slide 11: Our products enable a stable energy transition
Our products enable a stable energy transition 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 reliable baseload and
Slide 12: Economic growth driving energy demand
Economic growth driving energy demand 2 3 World population (billion) World real GDP ($ trillion) 10 250 8 200 150 6 Global GDP expected to almost double by 2050 and 4 100 global population growth is forecast to continue 2 50 History Forecast History Forecast 0 0 Non-OECD energy demand increase expec
Slide 13: Resilient hydrocarbon demand in a range of scenarios
Resilient hydrocarbon demand in a range of scenarios 2 2 Oil demand (EJ) Natural gas demand (EJ) 400 400 300 300 STEPS 200 200 Demand for oil and natural gas expected to remain STEPS APS strong to 2050+ APS 100 100 NZE NZE 0 0 2020 2025 2030 2035 2040 2045 2050 Delivering IEA’s Announced Pledges sce
Slide 14: Natural gas is important for economic progress
Natural gas is important for economic progress 1 Global oil and gas pricing disrupted post Ukraine (Indexed to September 2020 at 100) 2,500 Ukraine crisis has disrupted global markets, highlighting the importance of energy security and 2,000 affordability 1,500 Global markets also impacted by renewa
Slide 15: Strategy to thrive through the energy transition
Strategy to thrive through the energy transition PROFITABLE High cash generation Robust investment decisions RESILIENT LOWER CARBON Strong balance sheet Targeted 30% reduction in net equity 1 Scope 1 and 2 emissions by 2030 Resilient across a range of possible energy-use scenarios New energy project
Slide 16: Global, competitively-positioned portfolio
Global, competitively-positioned portfolio Emerging new Conventional Diversified Geographically Long-life assets PORTFOLIO BENEFITS energy business production product mix diverse 1 Senegal Diversified sources of production Sangomar East coast US Gulf of Caribbean Western Australia (67%) East coast A
Slide 17: Disciplined capital allocation
Disciplined capital allocation 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 optionality for
Slide 18: Opportunities across multiple energy sources
Opportunities across multiple energy sources NEW OIL GAS ENERGY Hydrogen opportunities include H2OK, H2Perth, H2TAS, Southern Green Sangomar Phase 1 targeting first oil Scarborough development underway Hydrogen (SGH) late 2023 Future growth opportunities include Long-lead items ordered for H2OK, Tri
Slide 19: Merger benefits being realised
Merger benefits being realised Cash generation Shareholder Development Energy transition Synergies and Portfolio quality and balance returns and MERGER BENEFITS leadership value creation optionality sheet capital discipline Example synergy opportunities Implemented initiatives to deliver approximate
Slide 20: Investing in emissions reduction
Investing in emissions reduction 2 10% net emissions reduction achieved to 2021 Targets extended to merged portfolio Net zero 15% 30% SCOPE 1 AND 2 aspiration by 2050 by 2025 by 2030 Investing ~$500 million in asset decarbonisation or sooner Reducing our net equity greenhouse gas 3 plans 1 Net equit
Slide 21: A focus on sustainability and ESG issues
A focus on sustainability and ESG issues SOCIAL GOVERNANCE ENVIRONMENTAL First Nations cultural heritage and Climate resilience and Health, safety and wellbeing engagement transition Corporate governance TOPICS Human rights Decommissioning Cybersecurity People and culture Environment Major incident
Slide 22: Finance
FINANCE Graham Tiver Chief Financial Officer and Executive Vice President
Slide 23: Capital management optimising shareholder growth and returns
Capital management optimising shareholder growth and returns 1 2 3 Well positioned for major Capital management supports Resilient through the capital investment through strong dividends and growth price cycle 2023 and 2024 Special dividends Dividend Safe, reliable Investment Strong balance policy a
Slide 24: Liquidity capacity for major capital investment and shareholder returns
Liquidity capacity for major capital investment and shareholder returns Continuing strong liquidity 9.4 7.0 6.7 6.1 Undrawn facilities 3.9 Cash Strong liquidity supported by cash generation Liquidity Undrawn debt facilities of $4.1 billion 2018 2019 2020 2021 31-Oct-22 Balanced maturity profile; 3.6
Slide 25: Investing in growth
Investing in growth 1 Forecast capital expenditure – committed activities ($ billion) 7 Sangomar 6 5 Scarborough 4 2023 capital expenditure guidance of $6.0-6.5 billion GoM & 3 2 2 Caribbean 2 Australia, 1 Investing in Woodside’s future production Corporate & 3 3 Other 0 2022 2023 2024 2025 2026 202
Slide 26: Resilient cash flows
Resilient cash flows 1 Operating cash flow 10 8 6 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 1,2 construction and shareholder returns Free cash flow 8 6 Approximately $70 million movement i
Slide 27: Returning value to shareholders
Returning value to shareholders 1 Dividends paid (US cps) 160 100% 94% 90% 80% 81% 80% 79% 80% 120 70% Balance sheet positioned to deliver growth and returns 91 60% 105 80 50% History of strong shareholder returns 40% 55 109 30% 40 214 US cents per share of fully franked dividends paid in 20% 12 las
Slide 28: Marketing and Trading
MARKETING AND TRADING Mark Abbotsford Executive Vice President Marketing and Trading
Slide 29: Customer-led and value-led marketing strategy
Customer-led and value-led marketing strategy 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 Positioning as partner of choice to high- balances exposure to upside and
Slide 30: Increasing price index diversification and gas hub exposure
Increasing price index diversification and gas hub exposure Near-term (2023-2025) 1 Produced total portfolio • Leverage flexibility in base portfolio of oil-indexed sales to access upside through optimisation ~20% ~70% ~10% • Retain share of uncommitted production to de-risk operations and access sp
Slide 31: Increasing gas supply for Australian energy market needs
Increasing gas supply for Australian energy market needs Western Australia ~18% • LNG plants operate within WA’s domestic gas reservation policy Woodside 1 market share East coast Australia • Portfolio of gas supply sources delivered to a diverse customer Bass Strait base at largely fixed pricing, i
Slide 32: Projects
PROJECTS Matthew Ridolfi Executive Vice President Projects
Slide 33: Outstanding project delivery, benefiting from increased scale
Outstanding project delivery, benefiting from increased scale 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 Delivery ahead of sche
Slide 34: Pipeline of conventional opportunities
Pipeline of conventional opportunities GAS OIL Sunrise Browse Shenzi Atlantis UNSANCTIONED opportunities opportunities Calypso Mad Dog DEVELOPMENTS opportunities Western Australian opportunities Bass Strait Trion opportunities Mad Dog Bass Strait Pluto Train 2 Ethane Phase 2 Kipper Blending Compress
Slide 35: Sangomar Phase 1 – 72% complete, targeting first oil late 2023
Sangomar Phase 1 – 72% complete, targeting first oil late 2023 • Second rig in operation since July 2022 • 6 out of 23 development wells completed Drilling • On schedule with strong batch drilling performance Hull conversion • Conversion, topsides and turret fabrication complete FPSO • Integration a
Slide 36: Scarborough – 23% complete, targeting first LNG cargo 2026
Scarborough – 23% complete, targeting first LNG cargo 2026 • 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 tracking ahead of schedu
Slide 37: Managing risk
Managing risk 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 engagement and orders pla
Slide 38: Trion – progressing towards investment decision in 2023
Trion – progressing towards investment decision in 2023 Generates near-term cashflow STRATEGIC ALIGNMENT Value accretive investment Competitive development cost with quick payback 1 Material resource with ~500 million barrels of 2C contingent resource (gross) ROBUST PLAN Well-characterised subsurfac
Slide 39: Trion – mature development concept provides execution flexibility
Trion – mature development concept provides execution flexibility 1 Floating facilities • Semi-submersible floating production unit with capacity of 100 kbbl/d oil • Storage and offloading provided by separate vessel • 12.6 kg CO -e/boe emissions, benchmarks 2 below industry average for deepwater 1
Slide 40: Trion – clear path to final investment decision
Trion – clear path to final investment decision Subsurface characterisation Engineering work to support execution TECHNICAL Emissions reduction through design and operating philosophy High quality and experienced contractors engaged for major scopes Major scope of work competitively tendered CONTRAC
Slide 41: Australian Operations
AUSTRALIAN OPERATIONS Breyden Lonnie Vice President North West Shelf
Slide 42: Safe, low cost and lower carbon Australian operations
Safe, low cost and lower carbon Australian operations Western Australia Pluto | North West Shelf | Pyrenees | Macedon | Wheatstone | Julimar-Brunello | Ngujima-Yin | Okha Implementing area-specific safety improvement plans 2 1 Remaining resources (MMboe) Net production (kboe/d) SAFE Focused process
Slide 43: Maximising value from existing assets
Maximising value from existing assets Strong operational performance 1 Production (MMboe) • Continuously optimising production and challenging current and future 250 production constraints Woodside total • Maintaining high facility reliability 200 Scarborough Nearfield and infill opportunities First
Slide 44: Asset decarbonisation plans
Asset decarbonisation plans 1 Asset decarbonisation plan potential impacts (Heritage Woodside assets only) 5 Design out 4 Operate out Asset decarbonisation plans have identified opportunities for up to 300kt in potential emissions Offset 3 reductions by 2030 for heritage Woodside assets 2 Potential
Slide 45: Committed to responsible decommissioning
Committed to responsible decommissioning Indicative Australian Operations cumulative decommissioning spend 1 ($ billion) Enfield and Balnaves well plug and abandonment (P&A) 1.5 campaign in progress Bass Strait ongoing well P&A campaign and progressing 1.0 approvals and planning for platform decommi
Slide 46: International Operations
INTERNATIONAL OPERATIONS Shiva McMahon Executive Vice President International Operations
Slide 47: Safe, low cost and lower carbon international operations
Safe, low cost and lower carbon international operations Gulf of Mexico Shenzi | Mad Dog | Atlantis 2 3 Net production (kboe/d) Remaining resources (MMboe) Mature process and personal safety approach, driven by field leadership and active contractor involvement SAFE 972 55 Demonstrated deep water op
Slide 48: Gulf of Mexico
Gulf of Mexico Shenzi Atlantis Mad Dog First oil: 2007 First oil: 2005 First oil: 2009 Houston Working interest: 44% Working interest: 23.9% Working interest: 72% 1 1 1 Current production: 16 kboe/d Current production: 10 kboe/d Current production: 29 kboe/d Shenzi Mad Dog Atlantis Woodside licences
Slide 49: Maximising value of existing assets
Maximising value of existing assets Gulf of Mexico 1 Production (MMboe) • 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 maintain on-plateau produc
Slide 50: High-return future growth options in the Gulf of Mexico
High-return future growth options in the Gulf of Mexico 1 Average IRR for unsanctioned growth options (%) 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 years 0% Shenzi Atlantis
Slide 51: Exploration and Development
EXPLORATION AND DEVELOPMENT Andy Drummond Executive Vice President Exploration and Development
Slide 52: Exploration
Exploration 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 Leverage co-ownerships High return options near existing infrastructure Rapid, h
Slide 53: Calypso – development
Calypso – development Concept and resource 1 • 3.2 Tcf gross 2C contingent resource with additional unpenetrated potential Barbados • ~250 km to southeast coastline in Trinidad • Development concept screening is currently ongoing Barbados explorations licences Strategic fit Calypso Tobago • Trinidad
Slide 54: Browse – development
Browse – development Concept and resource 1 • 14.6 Tcf of gas and 412 MMbbl condensate (gross contingent resource, 2C) • 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 • Large resource with
Slide 55: Sunrise – development
Sunrise – development Concept and resource 1 • 5.3 Tcf (dry gas) and 226 MMbbl condensate (gross contingent resource, 2C) • Development concept screening in progress Timor - Leste Strategic fit Greater Indonesia Sunrise • Large resource with multiple development options • LNG opportunity supported b
Slide 56: New Energy
NEW ENERGY Shaun Gregory Executive Vice President New Energy
Slide 57: Executing our new energy and lower carbon services strategy
Executing our new energy and lower carbon services strategy CUSTOMER INTEGRATED CARBON NEW ENERGY COLLABORATION SOLUTIONS Working with customers to develop Targeting hydrogen and ammonia production Developing solutions to help decarbonise demand for new sources of energy leveraging Woodside’s core c
Slide 58: Integrated carbon solutions
Integrated carbon solutions CARBON MANAGEMENT Develop integrated carbon solutions to help our hydrocarbon business, new energy business and our customers STRATEGY CARBON CAPTURE AND OFFSETS CARBON TO PRODUCTS STORAGE (CCS) Originate high integrity offset units and Secure and accelerate CCS in Austra
Slide 59: Hydrogen and ammonia solutions
Hydrogen and ammonia solutions HYDROGEN AND Develop solutions and pursue technologies to assist our customers with their decarbonisation pathways AMMONIA STRATEGY INDUSTRIALS AND HEAVY DUTY SHIPPING AND POWER CHEMICALS TRANSPORT MARINE FUELS Decarbonisation of coal-fired Provide lower carbon Decarbo
Slide 60: A portfolio of new energy opportunities
A portfolio of new energy opportunities Woodside Solar 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 future Southern Green Hyd
Slide 61: H2OK progressing towards FID
H2OK progressing towards FID 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 supply Award engineering
Slide 62: New energy value chain
New energy value chain Power generation Processing, Liquids marketing Customers electrolysis + liquefaction Segments of the value chain Advantaged locations Large scale Key advantages and growth Strong global liquids Years of strong Power processing and catalysts for Woodside’s H2 marketing capabili
Slide 63: Close
CLOSE Meg O’Neill Chief Executive Officer and Managing Director
Slide 64: The investment case – a global energy supplier
The investment case – a global energy supplier DISCIPLINED CAPITAL HIGH QUALITY POSITIONED FOR THE MANAGEMENT PORTFOLIO ENERGY TRANSITION Framework established to optimise value Agile, flexible and adaptable as the Scale, diversification and resilience and shareholder returns world’s energy mix evol
Slide 65: Break
BREAK
Slide 66: Question and Answer
QUESTION AND ANSWER
Slide 67: Appendix
APPENDIX
Slide 68: 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 69: Glossary
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 70: Head Office: Woodside Energy Group Ltd
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