REG - Woodside Energy Grp. - Full-Year 2023 Results and Briefing

Woodside EnergyAnnouncement

27/02/2024 07:00

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RNS Number : 5858E  Woodside Energy Group Ltd  27 February 2024

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

 

Tuesday, 27 February 2024

 

WOODSIDE RELEASES FULL-YEAR 2023 RESULTS

 

Woodside has achieved record production of 187.2 MMboe (513 Mboe/d) and
excellent operated LNG reliability of 98%. We recorded full-year net profit
after tax (NPAT) of $1,660 million, and underlying NPAT of $3,320 million when
adjusted for exceptional items, and operating cash flow was $6,145 million. 1 

 

The Directors have determined a final dividend of US 60 cents per share (cps),
bringing the full-year dividend to US 140 cps. The dividend is fully franked.
The value of the total full-year dividend is $2,658 million.

 

Woodside CEO Meg O'Neill said she was tremendously proud that at a time of
inflationary pressures, Woodside continued to return strong dividends to
shareholders while delivering on our strategy to thrive through the energy
transition.

"Woodside is supplying energy the world needs from a high-quality portfolio
which is geographically advantaged to meet growing demand for LNG.

"Our focus on disciplined capital management has allowed us to deliver
consistently strong returns to shareholders. Underlying profit was strong,
enabling us to maintain an 80% dividend payout ratio.

"While realised prices were down year-on-year to levels closer to historic
norms, annual sales volume topped 200 million barrels of oil equivalent (over
548 Mboe/d), generating revenue of almost $14 billion. Free cash flow of $560
million was a significant achievement in a period of major capital expenditure
and normalised prices.

"We are contributing to Australia. Our tax contribution in Australia was a
record A$5 billion in 2023 and we are committed to maintaining the delivery of
affordable, reliable gas to Australian customers. For over almost 40 years of
operations in WA, Woodside has supplied domestic gas volumes equivalent to
more than one third of our exported liquefied natural gas (LNG) volumes.

"Climate is integral to our company strategy and we are on track to meet our
net equity Scope 1 and 2 emissions reduction targets. Across our business in
2023 Woodside achieved a reduction in net equity Scope 1 and 2 emissions of
12.5% below the starting base, against our target of 15% by 2025. 2 

"The 2023 result was built on record annual production of 187.2 million
barrels of oil equivalent (513 Mboe/d) in the first full year following the
completion of the merger with BHP's petroleum business. The production outcome
was underpinned by another outstanding year at our operated LNG assets, which
achieved 98% reliability over the year. Despite the inflationary environment,
unit production cost was steady at $8.3/boe.

"Our debt-free merger with BHP Petroleum added cash generating assets and
strengthened Woodside's balance sheet, giving us capacity for future capital
investments as well as ongoing returns. Gearing at year-end was 12.1% and our
total available liquidity was $7.8 billion, helping maintain our
investment-grade credit ratings.

"We achieved our value objectives for the sale of 10% equity in the
Scarborough Joint Venture to LNG Japan. 3  This was followed in 2024 by the
sale of 15.1% equity to JERA. 4  These transactions demonstrate the ongoing
demand for new gas supplies to support regional energy security.

"Across the industry, contracts for LNG continue to be signed with long
durations, signalling confidence in the future strength of the market from
both buyers and sellers. Woodside is geographically advantaged to meet the
forecast growing demand for LNG in Asia.

"Significant progress was made on Woodside's major growth projects over the
course of the year. The floating production storage and offloading facility
arrived at the Sangomar oil field off Senegal in February and with 17 wells
now drilled and completed at the project, we are on track for first production
in mid-2024.

"The Scarborough Energy Project received four key environmental approvals in
December 2023 and was 55% complete at the end of the year. We welcome the
Australian Government's plans to reform the system for offshore approvals and
are participating in the current consultation process.

"Since the start of 2024, we've completed the initial drydock of the hull for
the Scarborough floating production unit and the first modules for Pluto Train
2 have arrived and been installed on site in Western Australia.

"In 2023, we took a final investment decision (FID) on Trion, which is a
large, high-quality resource and will be Mexico's first deepwater oil
development. Expected returns from the development exceed Woodside's capital
allocation framework targets and the asset will be a strong contributor to
Woodside's future cashflows.

"Woodside's safety performance in 2023 was again below the standard we set for
ourselves, with the tragic loss of a colleague at the North Rankin Complex. We
have taken action to prevent a repeat of such events, commissioning an
external review of our safety systems. It is imperative that we do better in
2024.

"In our Climate Transition Action Plan released today, Woodside announced a
new target to take FID on new energy products and lower carbon services with
total greenhouse gas emissions abatement capacity of 5 million tonnes per
annum by 2030. This will complement our existing target to invest $5 billion
in such products and services in the same timeframe with a focus on the
abatement impact of these products.

"We continued to be disciplined and value-focused in pursuing new energy
opportunities. We progressed H2OK to technical readiness for FID and are
evaluating the proposed US Federal tax incentive criteria. We also commenced
concept select for Angel carbon capture and storage, which has the potential
to address Woodside Scope 1 emissions and customer emissions.

"In 2024, we are looking forward to celebrating 40 years of safe, reliable
domestic gas supply to Western Australia and 35 years of LNG supply to
customers overseas.

"We are focused on delivering first oil from Sangomar and progressing the
Scarborough Energy Project and Trion development."

 

Financial headlines

 

 Metric                            Units     FY23    FY22    Change
 NPAT                              $million  1,660   6,498   (74%)
 Underlying NPAT 5                 $million  3,320   5,230   (37%)
 Operating revenue                 $million  13,994  16,817  (17%)
 Operating cashflow                $million  6,145   8,811   (30%)
 Free cash flow(5)                 $million  560     6,546   (91%)
 Annual sales volume               MMboe     201.5   168.9   19%

                                   Mboe/d    552     463
 Averaged realised price           $/boe     68.6    98.4    (30%)
 Unit production cost              $/boe     8.3     8.1     2%
 Fully franked final dividend      US cps    60      144     (58%)
 Full-year fully franked dividend  US cps    140     253     (45%)

 

Compared with 2022, 2023 full-year financial statements primarily reflected
lower prices across all commodities, partly offset by higher sales volumes.

Reported results include non-cash post-tax asset impairments amounting to
$1,533 million ($1,917 million pre-tax), reflecting approximately $1,178
million ($1,383 million pre-tax) impairment for the Shenzi asset. This is
primarily related to goodwill and a portion of the purchase price assigned to
Shenzi on completion of the merger with BHP Petroleum. The goodwill and
purchase price allocation resulted from application of acquisition accounting
principles and reflect both higher hydrocarbon prices and Woodside's share
price at the merger completion date. Goodwill is not amortised and, once
impaired, is not subject to a future impairment reversal. For reference,
Shenzi represented approximately 5% of 2023 production and approximately 2% of
2023 year-end proved plus probable reserves.

 

Key business activities

 

Strategic achievements

·      Delivered record production in the first full-year period
following the merger with BHP petroleum

·      Signed multiple agreements to sell an equity interest in the
Scarborough Joint Venture to LNG Japan and, subsequent to the period, JERA,
and established a broader strategic relationship which includes potential LNG
offtake and collaboration on opportunities in new energy and carbon
management 6 

·      Approved a final investment decision (FID) on the Trion project,
which is expected to generate strong returns and commence production in 2028
 

·      Signed a sales and purchase agreement (SPA) with Mexico Pacific,
strategically expanding our trading portfolio 7 

 

Operations and projects

·      Delivered annual production of 187.2 MMboe (513 Mboe/d)

·      Maintained strong operated LNG reliability of 98%

·      Reduced net equity Scope 1 and 2 emissions 12.5% below starting
base 8 

·      Achieved first oil at Mad Dog Phase 2 Argos facility, in the US
Gulf of Mexico

·      Continued to unlock additional phases of existing projects
including FIDs at Mad Dog Southwest, Julimar Brunello Phase 3 and Lambert
West 9 

·      Progressed future growth projects at Sangomar and Scarborough

 

 

Full-year reporting

 

Woodside's Annual Report 2023 provides further detail on our operations,
activities and our financial position for the 12-month period ended 31
December 2023.

 

Woodside's approach to climate is an integral part of our company strategy.
Woodside's Climate Transition Action Plan 2023 (CTAP) outlines our approach to
climate change and strategy for Woodside to thrive

through the energy transition as a low cost, lower carbon energy provider.

 

Full-year results teleconference

 

A teleconference providing an overview of the full-year 2023 results and a
question-and-answer session will be hosted by Woodside CEO and Managing
Director, Meg O'Neill, and Chief Financial Officer, Graham Tiver, today at
10:00 AEDT / 07:00 AWST (17:00 CST on Monday, 26 February 2024).

 

We recommend participants pre-register 5 to 10 minutes prior to the event with
one of the following links:

 

·      https://webcast.openbriefing.com/wds-fyr-2024/
(https://webcast.openbriefing.com/wds-fyr-2024/) to view the presentation and
listen to a live stream of the question-and-answer session

 

·      https://s1.c-conf.com/diamondpass/10035979-fh876t.html
(https://s1.c-conf.com/diamondpass/10035979-fh876t.html) to participate in the
question-and-answer session. Following pre-registration, participants will
receive the teleconference details and a unique access passcode.

 

The full-year results briefing pack follows this announcement and will be
referred to during the teleconference. The briefing pack, Annual Report 2023,
CTAP 2023, and teleconference archive will also be available on the Woodside
website (www.woodside.com (http://www.woodside.com) ).

 

Climate Transition Action Plan presentation

A teleconference to provide an overview of Woodside's Climate Transition
Action Plan 2023 will be hosted on Tuesday, 12 March 2024 at 09:30 AEDT /
06:30 AWST / 17:30 CDT (Monday, 11 March 2014).

 

We recommend participants pre-register 5 to 10 minutes prior to the event with
the following link:

·    https://s1.c-conf.com/diamondpass/10035868-hf74t6.html
(https://s1.c-conf.com/diamondpass/10035868-hf74t6.html) to view the
presentation and listen to a live stream of the question and answer.

 

Annual General Meeting

Woodside's Annual General Meeting will be held in Perth, Western Australia, on
Wednesday,

24 April 2024 at 13:00 AEDT / 10.00 AWST (Tuesday, 23 April 20:00 CST).

 

 

 Contacts:

 INVESTORS                                                 MEDIA

 Marcela Louzada                                           Christine Forster

 M: +61 456 994 243                                        M: +61 484 112 469

 E: investor@woodside.com (mailto:investor@woodside.com)   E: christine.forster@woodside.com (mailto:christine.forster@woodside.com)

This announcement was approved and authorised for release by Woodside's
Disclosure Committee.

 

 

Forward-looking statements

 

This announcement 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 regarding development, completion and execution of Woodside's
projects, expectations regarding future capital expenditures, future results
of projects, operating activities, new energy products, expectations and plans
for renewables production capacity and investments in, and development of,
renewables projects, expectations and guidance with respect to production,
investment expenditure and gas hub exposure for 2024, and expectations
regarding the achievement of Woodside's net equity Scope 1 and 2 greenhouse
gas emissions targets. All statements, other than statements of historical or
present facts, are forward-looking statements and generally may be identified
by the use of forward-looking words such as 'guidance', 'foresee', 'likely',
'potential', 'anticipate', 'believe', 'aim', 'estimate', 'expect', 'intend',
'may', 'target', 'plan', 'strategy', 'forecast', 'outlook', 'project',
'schedule', 'will', 'should', 'seek' and other similar words or expressions.
Similarly, statements that describe the objectives, plans, goals or
expectations of Woodside are forward-looking statements.

Forward-looking statements in this presentation are not guidance, forecasts,
guarantees or predictions of future events or performance, but are in the
nature of future expectations that are based on management's current
expectations and assumptions. Those statements and any assumptions on which
they are based are subject to change without notice and are subject to
inherent known and unknown risks, uncertainties, assumptions and other
factors, many of which are beyond the control of Woodside, its related bodies
corporate and their respective Beneficiaries. Important factors that could
cause actual results to differ materially from those in the forward-looking
statements include, but are not limited to, fluctuations in commodity prices,
actual demand for Woodside products, currency fluctuations, geotechnical
factors, drilling and production results, gas commercialisation, development
progress, operating results, engineering estimates, reserve and resource
estimates, loss of market, industry competition, environmental risks, climate
related risks, physical risks, legislative, fiscal and regulatory
developments, changes in accounting standards, economic and financial markets
conditions in various countries and regions, political risks, project delay or
advancement, regulatory approvals, the impact of armed conflict and political
instability (such as the ongoing conflict in Ukraine) on economic activity and
oil and gas supply and demand, cost estimates, and the effect of future
regulatory or legislative actions on Woodside or the industries in which it
operates, including potential changes to tax laws, and the impact of general
economic conditions, inflationary conditions, prevailing exchange rates and
interest rates and conditions in financial markets.

A more detailed summary of the key risks relating to Woodside and its business
can be found in the "Risk" section of Woodside's most recent Annual Report
released to the Australian Securities Exchange and the London Stock Exchange
and in Woodside's most recent Annual Report on Form 20-F filed with the United
States Securities and Exchange Commission (SEC) and available on the Woodside
website at https://www.woodside.com/investors/reports-investor-briefings. You
should review and have regard to these risks when considering the information
contained in this presentation.

Investors are strongly cautioned not to place undue reliance on any
forward-looking statements. Actual results or performance may vary materially
from those expressed in, or implied by, any forward-looking statements.

Announcement contains inside information

 

This announcement contains inside information. Marcela Louzada, Vice President
Investor Relations is responsible for release of this announcement.

 

Non-IFRS Financial Measures

 

Throughout this presentation, a range of financial and non-financial measures
are used to assess Woodside's performance, including a number of financial
measures that are not defined in, and have not been prepared in accordance
with, International Financial Reporting Standards (IFRS) and are not
recognised measures of financial performance or liquidity under IFRS (Non-IFRS
Financial Measures). These measures include EBIT, EBITDA, EBITDA excluding
impairment, Gearing, Underlying NPAT, Underlying earnings per share, Net debt,
Free cash flow, Cash margin, Capital expenditure, and Exploration expenditure.
These Non-IFRS Financial Measures are defined in the glossary section of this
presentation. A quantitative reconciliation of these measures to the most
directly comparable financial measure calculated and presented in accordance
with IFRS can be found in Woodside's Annual Report for the period ended 31
December 2023.

Woodside's management uses these measures to monitor Woodside's financial
performance alongside IFRS measures to improve the comparability of
information between reporting periods and business units and Woodside believes
that the Non-IFRS Financial Measures it presents provide a useful means
through which to examine the underlying performance of its business.

Undue reliance should not be placed on the Non-IFRS Financial Measures
contained in this presentation and these Non-IFRS Financial Measures should be
considered in addition to, and not as a substitute for, or as superior to,
measures of financial performance, financial position or cash flows reported
in accordance with IFRS. Non-IFRS Financial Measures are not uniformly defined
by all companies, including those in Woodside's industry. Accordingly, they
may not be comparable with similarly titled measures and disclosures by other
companies.

 

Other important information

 

All references to dollars, cents or $ in this presentation are to US currency,
unless otherwise stated.

References to "Woodside" may be references to Woodside Energy Group Ltd and/or
its applicable subsidiaries (as the context requires).

 

 

 1  Non-IFRS financial measure. Refer to the glossary section of the attached
presentation for the definition.

 2  Targets and aspiration are for net equity Scope 1 and 2 greenhouse gas
emissions relative to a starting base of 6.32 Mt CO2-e which is representative
of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over
2016-2020 and which may be adjusted (up or down) for potential equity changes
in producing or sanctioned assets with a final investment decision prior to
2021. Net equity emissions include the utilisation of carbon credits as
offsets.

 3  LNG Japan transaction subject to completion of the transaction, targeted
for the first quarter of 2024.

 4  The sale and purchase agreement is with JERA Scarborough Pty Ltd which is
a wholly owned subsidiary of JERA Co., Inc. Subject to completion of the
transaction, targeted for the second half of 2024.

 5  Non-IFRS financial measure. Refer to the glossary section of the attached
presentation for the definition.

 6  LNG Japan transaction subject to completion of the transaction, targeted
for the first quarter of 2024. JERA transaction is subject to completion of
the transaction, targeted for the second half of 2024.

 7  The SPA is subject to Mexico Pacific taking FID on the proposed third
train at the Saguaro Energia LNG Project. The FID is expected in the second
half of 2024 and commercial operations are targeted to commence in 2029.

 8  Targets and aspiration are for net equity Scope 1 and 2 greenhouse gas
emissions relative to a starting base of 6.32 Mt CO2-e which is representative
of the gross annual average equity Scope 1 and 2 greenhouse gas emissions over
2016-2020 and which may be adjusted (up or down) for potential equity changes
in producing or sanctioned assets with a final investment decision prior to
2021. Net equity emissions include the utilisation of carbon credits as
offsets.

 9  Lambert West was approved subsequent to the period.

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