Woodside Energy Group Ltd · ASX:WDS
Woodside Energy — Investor Day (September 2024)
53 slides from Woodside Energy's investor day presentation, Sep 16, 2024
Slide 1: US Investor Event Presentation announcement
Woodside Energy Group Ltd ACN 004 898 962 Mia Yellagonga 11 Mount Street Perth WA 6000 Australia T +61 8 9348 4000 www.woodside.com ASX: WDS NYSE: WDS LSE: WDS Announcement For personal use only Monday, 16 September 2024 US INVESTOR EVENT PRESENTATION A US investor event providing an overview of the
Slide 2: Global LNG Deep Dive
For personal use only GLOBAL LNG DEEP DIVE 16 September 2024 www.woodside.com investor@woodside.com
Slide 3: Disclaimer, important notes and assumptions
Disclaimer, important notes and assumptions Information plans, goals or expectations of Woodside are forward-looking statements. For personal use only • This presentation has been prepared by Woodside Energy Group Ltd (“Woodside”). • Forward-looking statements in this presentation are not guidance,
Slide 4: Disclaimer, important notes and assumptions (continued)
Disclaimer, important notes and assumptions (continued) Notes to petroleum resource estimates regulatory approvals will be obtained. Additional assumptions relevant to particular targets or other statements in this • For offshore oil projects, the reference point is defined as the outlet of the floa
Slide 5: Agenda
Agenda For personal use only 1 Woodside overview and business model 2 Macroeconomic LNG trends 3 Marketing strategy and insights 4 Financial overview 5 Close 4
Slide 6: Unique portfolio of global high quality LNG and deepwater oil assets
Unique portfolio of global high quality LNG and deepwater oil assets For personal use only LNG operating Western Australia experience Market capitalisation1 326 Mboe/d 35 years ~$ 35 billion East coast Australia 47 Mboe/d Houston Production2 LNG sales3 > 500 Mboe/d 263 Mboe/d Gulf of Mexico 91 Mboe/
Slide 7: Compelling investment thesis
Compelling investment thesis For personal use only High quality Operational Shareholder value Positioned for the portfolio excellence and returns energy transition Geographically advantaged to 35 years of operating experience in Disciplined capital management Delivering on emissions reduction meet g
Slide 8: Our strategy is to thrive through the energy transition
Our strategy is to thrive through the energy transition For personal use only We aim to thrive through the energy transition with a low cost, Three goals drive Woodside’s strategic direction lower carbon, profitable, resilient and diversified portfolio Pr o f i t a b l e 1 Provide energy n r bo Re t
Slide 9: Building strong business foundations
Building strong business foundations 2023 | Took FID for the For personal use only Trion development Executed additional 2021 | Took FID for merchant LNG offtake the Scarborough 2013 | Executed Energy Project first merchant LNG offtake contract Began establishing 2024 | Production Karratha Gas Plant
Slide 10: Delivering near term growth through large scale projects
Delivering near term growth through large scale projects For personal use only Sangomar Scarborough Trion FPSO facility, located offshore Senegal 8 Mtpa LNG project capacity (100%) FPU facility, offshore Mexico, with oil plus domestic gas, located offshore production capacity of 100,000 First oil ac
Slide 11: A differentiated LNG business model
A differentiated LNG business model For personal use only How Woodside adds value Portfolio construction considerations Operations ▪ Predominantly operated assets, with some non- ▪ Lower unit cost and high reliability across operated assets operated positions, to balance control and ▪ History of deb
Slide 12: Geographic diversity and scale to leverage portfolio efficiencies
Geographic diversity and scale to leverage portfolio efficiencies Atlantic LNG Pacific LNG For personal use only Operated Stage / capacity (100%) Operated Stage / equity interest Driftwood LNG NWS Project Producing 5.6 Mtpa Pre-FID 16.5 Mtpa (Phase 1 and 2) Pluto LNG Producing 4.4 Mtpa Driftwood LNG
Slide 13: World class LNG operations
World class LNG operations For personal use only North West Shelf Project Pluto LNG Scarborough Energy Project Woodside equity 25-33.33% 90% 74.9% (upstream)1, 51% (downstream) First LNG cargo 1989 2012 Targeting 2026 EBITDA margin ~83% (HY 2024) ~87% (HY 2024) n/a Gross capacity 16.9 Mtpa 4.9 Mtpa
Slide 14: Shaping an LNG business for the future
Shaping an LNG business for the future For personal use only Driftwood LNG Project1 Established position as a portfolio player ▪ High quality, scalable development option Increasing supply diversity through Scarborough ▪ Fully permitted for 27.6 Mtpa Energy Project and third-party offtake contracts
Slide 15: Macroeconomic Overview
For personal use only MACROECONOMIC OVERVIEW Meg O’Neill Chief Executive Officer and Managing Director
Slide 16: Increasing GDP per capita expected to drive energy demand
Increasing GDP per capita expected to drive energy demand For personal use only Expected population increase to ~10 billion by 2050 from ~8 Energy consumption per capita expected to grow as global billion in 20231, impacting forecast GDP per capita living standards rise3 GDP per capita (constant pri
Slide 17: Growing need for energy as population and living standards increase
Growing need for energy as population and living standards increase For personal use only Number of people lacking access to electricity remains high, As countries’ standards of living improve, energy use per capita estimated ~685 million people in 20221 and total energy demand is expected to increa
Slide 18: Clear benefits of LNG
Clear benefits of LNG For personal use only Flexible Reliable Lower carbon Globally mobile Proven and increasingly deep market Half the lifecycle emissions of coal1 Seasonally adaptable Firming power for grids with renewables Can help countries decarbonise Fits into existing gas networks Established
Slide 19: Opportunity for LNG to displace coal
Opportunity for LNG to displace coal Global coal consumption and global LNG trade (exajoules)1 For personal use only 180 Paris Agreement 160 Coal accounted for 25% of global primary 140 energy consumption in 20231 120 Kyoto Coal demand in emerging markets and 100 Protocol developing economies was th
Slide 20: LNG can help countries decarbonise
LNG can help countries decarbonise Case study: coal-to-gas switching was the largest driver of energy For personal use only Coal remains a significant portion of energy mix related emissions reductions in the US in 20232 US case study: change in CO2 emissions from electricity generation by driver in
Slide 21: Strong LNG demand growth expected
Strong LNG demand growth expected For personal use only LNG demand by region (Mtpa)1 Demand drivers 700 ▪ Customers’ decarbonisation goals >50% 600 ▪ Energy security 500 ▪ Gas as firming power for renewables >60% 400 Pacific Basin Supply pressures 300 ▪ Regulatory environments 200 ▪ Project executio
Slide 22: Market appetite for LNG
Market appetite for LNG Europe For personal use only Increased near-term LNG growth Japan, Korea, Taiwan Appetite for long-term contracts, recognising Value certainty of supply and complexity of renewable decarbonisation ramp-up Appetite for long-term oil LNG market remains indexed contracts and JKM
Slide 23: US supply and Asian demand expected to lead growth
US supply and Asian demand expected to lead growth For personal use only Europe China US is flexible to supply Europe and Asia US Japan New LNG investment to be underpinned by demand growth in Qatar Asian markets India Latin America Africa Australia Supply1 Demand1 2024 2040 2024 2040 22 1. Wood Mac
Slide 24: New supply finds demand with resilient pricing over the longer term
New supply finds demand with resilient pricing over the longer term For personal use only Historical LNG Price ($US/MMbtu) and historical global LNG supply growth (Mtpa)2,3 70 60 “looming glut could have far- reaching effects on gas pricing” IEA, November 2009 Global LNG supply growth is likely to b
Slide 25: Contracting appetite signals confidence in demand
Contracting appetite signals confidence in demand For personal use only Contracts signed by China and South/South-East Asia reinforces Increase in longer duration LNG contracts confidence in Asian demand Global LNG contracts by destination (annual contract quantity, Mtpa)1 Global LNG contracts by du
Slide 26: Marketing
For personal use only MARKETING Mark Abbotsford Executive Vice President and Chief Commercial Officer
Slide 27: Competitively advantaged marketing portfolio
Competitively advantaged marketing portfolio For personal use only Advantaged global Portfolio marketing Deep customer Long shipping supply strategy relationships position Proximity to demand hubs Portfolio seller enables flexibility Dedicated global marketing teams Seven LNG carriers on long-term a
Slide 28: Woodside portfolio enables value capture from market volatility
Woodside portfolio enables value capture from market volatility Historical US Gulf Coast Netbacks from JKM, European Gas Marker and Brent ($US/MMbtu) For personal use only 40 Periods where flexibility can capture optimisation value Diversification in the Atlantic and Pacific 30 Basins unlocks market
Slide 29: Price volatility: how value is captured
Price volatility: how value is captured Value driver opportunity examples (US$/MMbtu) For personal use only 1 2 3 Exercise contract options Utilise shipping length Optimise supply portfolio Woodside’s global position means that we can capture opportunities consistently Increase volumes delivered und
Slide 30: Shipping fleet enables value capture
Shipping fleet enables value capture Woodside’s fleet For personal use only Fleet ensures safe, reliable and efficient Woodside Woodside delivery of LNG Donaldson Rogers Quality operators with modern design offers lower carbon intensity shipping Woodside Woodside Four new committed builds to be deli
Slide 31: Deep dive: practical example case study
Deep dive: practical example case study For personal use only 1 2 3 Example supply Optimisation opportunity to divert to Europe, taking Value capture enabled offtake contract1 advantage of index and flexible contracts by Woodside’s approach US Gulf Coast supply contract Advantaged with base delivery
Slide 32: Portfolio has high oil indexation with price diversity
Portfolio has high oil indexation with price diversity For personal use only Produced Produced LNG portfolio 1 Produced total portfolio 1 total portfolio composition Near-term Longer-term Near-term Longer-term (2023)2 (2024-2025) (2027+) (2024-2025) (2027+) ~25- ~30- ~10% 30% Gas hub: 35% ~20% JKM,
Slide 33: Recent Woodside contracting reflects strong market demand
Recent Woodside contracting reflects strong market demand 1 2 3 4 For personal use only KOGAS CPC Taiwan JERA LNG Japan Size: 0.5 Mtpa Size: 0.6 Mtpa Scarborough JV Scarborough JV Tenure: 10.5 years Tenure: 10 years investment: 15.1%3 investment: 10%4 Commencement: 20261 Option: +10 years Commenceme
Slide 34: Woodside's global marketing and trading business
Woodside’s global marketing and trading business For personal use only ▪ Add value, with transparency through separately ▪ Optimise LNG flows and logistics reported segment ▪ Be recognised as a reliable LNG supplier ▪ Benefit from economies of scale of global Woodside’s portfolio ▪ Develop strong re
Slide 35: Financial Strength
For personal use only FINANCIAL STRENGTH Graham Tiver Executive Vice President and Chief Financial Officer
Slide 36: Disciplined capital management, long-term shareholder value
Disciplined capital management, long-term shareholder value For personal use only Consistent cost Disciplined investment Actively managed focus decisions balance sheet Unit production costs down and cash Opportunities must have compelling strategic Active management of debt portfolio conversion up (
Slide 37: Disciplined capital allocation framework
Disciplined capital allocation framework OIL GAS NEW ENERGY For personal use only 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 hydro
Slide 38: Capital management framework to optimise value and returns
Capital management framework to optimise value and returns For personal use only Special dividends Safe, reliable Strong Dividend Investment policy Share buy-backs and low cost balance expenditure (minimum 50% operations sheet payout ratio) Future investment Excess cash Investment grade Maintain div
Slide 39: Strong earnings and balance sheet from diversified global portfolio
Strong earnings and balance sheet from diversified global portfolio H1 2024 H1 2023 Change For personal use only Operating revenue $m 5,988 7,400 19% Strong half-year underlying NPAT EBITDA1 $m 4,371 4,888 11% $8.3/boe unit production cost, reduced 6% in an EBIT1 $m 2,362 2,791 15% inflationary envi
Slide 40: Well positioned balance sheet for capital investment and returns
Well positioned balance sheet for capital investment and returns Balance sheet Dividend distribution For personal use only Gearing of 13.3% at the lower end of target range1 Interim dividend of $1.3 billion, fully franked, representing a half-year annualised dividend yield of 7.3%5 Strong liquidity
Slide 41: Distinctive investment differentiation
Distinctive investment differentiation For personal use only 1 STRONG MARGIN 2 HIGH DIVIDEND YIELD 3 GAS WEIGHTED EBITDA margin (%)1 Last 12 months yield2 % gas in portfolio3 80% 15% Dividend yield Buyback contribution 90% 60% 10% 60% 40% 5% 30% 20% 0% 0% 0% Dataset: Woodside versus industry peers (
Slide 42: Close
For personal use only CLOSE Meg O’Neill Chief Executive Officer and Managing Director
Slide 43: Woodside's Scope 1, 2 and 3 emissions reduction targets
Woodside’s Scope 1, 2 and 3 emissions reduction targets For personal use only SCOPE 1 AND 2 15% 30% Net zero by 2025 by 2030 aspiration by 2050 or sooner Reduce our net equity greenhouse gas emissions Net equity emissions reduction targets1 SCOPE 3 $5 billion 5 Mtpa CO2-e Investing in the products a
Slide 44: Long history of LNG expertise
Long history of LNG expertise For personal use only Project track record Operational excellence Marketing capability Demonstrated capability in LNG plant 35 years of LNG operations Strong reputation as a reliable energy development supplier ~98% reliability across operated LNG Long-term relationship
Slide 45: Compelling investment thesis
Compelling investment thesis For personal use only High quality Operational Shareholder value Positioned for the portfolio excellence and returns energy transition Geographically advantaged to 35 years of operating experience in Disciplined capital management Delivering on emissions reduction meet g
Slide 46: Q&A
For personal use only Q&A
Slide 47: Appendix
For personal use only APPENDIX
Slide 48: Driftwood LNG: adds scalable Atlantic LNG exposure to portfolio
Driftwood LNG: adds scalable Atlantic LNG exposure to portfolio For personal use only Attractive entry into a scalable, fully permitted, 27.6 Mtpa US LNG development option with a cost-competitive phased development plan Providing energy Pathway to material complementary presence in the Atlantic Bas
Slide 49: OCI: acquiring one of the world's first lower carbon ammonia projects
OCI: acquiring one of the world’s first lower carbon ammonia projects For personal use only 1.1 Mtpa project under construction; with cost, schedule and performance guarantees, Providing targeting production of first ammonia from 2025 and lower carbon ammonia from 20261,2,3,4 energy Exceeds Woodside
Slide 50: OCI acquisition: building exposure to a growing ammonia market
OCI acquisition: building exposure to a growing ammonia market For personal use only Global ammonia demand (million tonnes per annum)1 Existing global market of ~200 Mtpa traded on a blend of 500 spot and medium-term contracts 100% Hydrogen carrier Lower carbon ammonia expected to exceed 250 Mtpa by
Slide 51: Glossary
Glossary FEED Front-end engineering design FID Final investment decision $, $m, $B US dollar unless otherwise stated, millions of dollars, billions of dollars For personal use only FPSO Floating production storage and offloading A$, AUD Australian dollar FPU Floating production unit Woodside uses th
Slide 52: Glossary
Glossary Electricity indirect GHG emissions. Scope 2 accounts for GHG emissions from the generation of purchased Woodside uses this term to describe technologies, such as CCUS or offsets, that may be capable of electricity consumed by the company. Purchased electricity is defined as electricity that
Slide 53: For personal use only
Head Office: For personal use only 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 companyinfo@woodside.com Woodside Energy Group Ltd ABN 55 004 898 962 woods
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