REG - Woodside Energy Grp. - Line-item guidance and other items

Woodside EnergyAnnouncement

14/02/2023 07:01

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230214:nRSN8423Pa&default-theme=true

RNS Number : 8423P  Woodside Energy Group Ltd  14 February 2023

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, 14 February 2023

 

 

LINE-ITEM GUIDANCE AND OTHER ITEMS

 

Woodside's 2022 full-year results are scheduled for release on Monday, 27
February 2023.

 

This announcement contains line-item guidance and other information relevant
to the 2022 full-year results, and information about future application of
Woodside's depreciation policy.

 

 

2022 full-year line-item guidance

                                                                    Comments
 Depreciation and amortisation
 Oil and gas properties                   $ million  2,700 - 2,900
 Lease assets                             $ million  130 - 150

 Cost of production
 Production cost                          $ million  1,230 - 1,330

 Other income
 Other income                             $ million  690 - 770      Includes sale of 49% of the Pluto Train 2 Joint Venture

 Other costs
 Impairment reversals (benefit)           $ million  ~(900)         ~($630m) post-tax
 General, administrative and other costs  $ million  750 - 830      Includes merger transaction costs
 Other                                    $ million  1,000 - 1,100  Includes hedging losses

 Taxes
 PRRT benefit                             $ million  290 - 330      Includes recognition of Pluto DTA (refer to detail on the following page)
 Income tax expense                       $ million  2,800 - 3,000  Includes effect of Pluto PRRT DTA (~$408m) and Wheatstone impairment reversal
                                                                    (~$270m)

 

 

Asset value review: impairment reversals and deferred tax asset recognition

 

Woodside has undertaken a review of the year-end carrying values of its assets
in accordance with its accounting policies and the accounting standards. As a
result, the 2022 full-year financial statements are expected to recognise a
non-cash, post-tax asset value impairment reversal of approximately
$630 million (pre-tax value of approximately $900 million) for the
Wheatstone asset, primarily due to a revision in short and long term LNG price
assumptions.

 

Woodside also expects to recognise a Pluto petroleum resource rent tax (PRRT)
deferred tax asset (DTA) of approximately $1,360 million, primarily due to
higher 2022 income, improved future price assumptions and additional volumes
processed through the Pluto-KGP Interconnector. The DTA is recognised as a
benefit in the PRRT tax line item in the consolidated income statement in the
financial statements, and is included in the PRRT line item guidance above.

 

The Wheatstone impairment reversals and Pluto PRRT DTA will be excluded from
underlying net profit after tax (NPAT) for the purposes of calculating the
2022 full year dividend, consistent with prior practice.

 

 

Change in application of depreciation policy from 2023

 

Woodside has undertaken a review of the Group's depreciation methodology for
oil and gas properties in accordance with its accounting policies and the
accounting standards, considering the scale and diversity of the post-merger
portfolio and to ensure alignment with common industry practice.

 

Woodside's existing accounting policy permits the depreciation of upstream
assets on a unit of production basis using either proved (1P) or proved plus
probable (2P) reserves. From 2023, upstream oil and conventional gas assets
will be depreciated over proved reserves (previously proved plus probable,
except for certain assets considered late life). Upstream LNG assets will
continue to be depreciated over proved plus probable reserves. Multiproduct
assets are assessed on a case-by-case basis and aligned to the most
appropriate method.

 

This change better aligns with the investment decision making process for oil
and conventional gas projects. This change applies to Woodside's interests in
Shenzi, Atlantis, Mad Dog, Greater Angostura, Ngujima-Yin, Pyrenees, Macedon
and Bass Strait.

 

Depreciation of Pluto, North West Shelf and Wheatstone will remain on a proved
plus probable basis and all other assets will remain on a proved basis.

 

The indicative depreciation expense in 2023 is expected to be approximately
$4.4 billion. 1  (#_ftn1) This includes the effect of the expected Wheatstone
impairment reversal and any asset value adjustments resulting from the
purchase price allocation due to the merger with BHP's petroleum business.

 

 

2023 planned major maintenance

 

Major turnaround activity in 2023 is planned for the following assets:

 

·      Pluto LNG major turnaround in Q2 2023, duration approximately 4
weeks

·      North West Shelf LNG Train 1 major turnaround in Q3 2023,
duration approximately 4 weeks

·      Ngujima-Yin FPSO dry dock in H1 2023, duration approximately 4
months.

 

Woodside's 2023 full-year production guidance remains unchanged at 180 - 190
MMboe.

Reserves reporting

 

The Reserves Statement to be included in the 2022 full-year results will
consolidate the reporting of certain assets into regional groups of greater
materiality, which is better aligned with industry practice and consistent
with the scale of the post-merger portfolio. The consolidated asset groups
are:

 

·      Exmouth, comprising Ngujima-Yin, Pyrenees, Macedon and
Julimar-Brunello

·      Gulf of Mexico, comprising Shenzi, Shenzi North, Atlantis and Mad
Dog

·      International, comprising Angostura, Ruby, Sangomar, Trinidad
& Tobago Deep Water and Trion.

 

 

2022 full-year results and teleconference

 

Woodside's Annual Report 2022, Sustainable Development Report 2022, Climate
Report 2022 and associated investor briefing will be released to the market on
Monday, 27 February 2023, and will be available on Woodside's website at
www.woodside.com (http://www.woodside.com) .

 

A teleconference providing an overview of the 2022 full-year 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, on Monday,
27 February at 10:00 AEDT / 07:00 AWST (17:00 CST Sunday, 26 February).

 

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-2023/
(https://webcast.openbriefing.com/wds-fyr-2023/) to view the presentation and
listen to a live stream of the question-and-answer session

·      https://s1.c-conf.com/diamondpass/10028290-3mrhp6.html
(https://s1.c-conf.com/diamondpass/10028290-3mrhp6.html) to participate in the
question-and-answer session. Following pre-registration, participants will
receive the teleconference details and a unique access passcode.

 

 

 Contacts:

 INVESTORS                  MEDIA

 Matthew Turnbull (Group)   Christine Forster

 M: +61 410 471 079         M: +61 484 112 469

                            E: christine.forster@woodside.com

 Sarah Peyman (Australia)

 M: +61 457 513 249

 Rohan Goudge (US)

 M: +1 (713) 679-1550

 E: investor@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 which reflect Woodside's views held as at the date of
this announcement. Forward-looking statements 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', 'forecast', 'project', 'schedule', 'will', 'should',
'seek' and other similar words or expressions. These forward-looking
statements include, but are not limited to, statements about Woodside's
expectations and guidance with respect to asset valuations and the application
of depreciation policy. Forward-looking statements are not guarantees of
future performance 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
officers, directors, employees, advisers or representatives. Important factors
that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, drilling and
production results; gas commercialisation; development progress; operating
results; engineering estimates; environmental risks; physical risks; project
delay or advancement; approvals; fluctuations in commodity prices; 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; the effect of
future regulatory or legislative actions on Woodside or the industries in
which it operates, including potential changes to tax laws; inflation and
government efforts to reduce inflation; increases in interest rates; and
fluctuations in currency exchange rates.

 

Details of the key risks relating to Woodside and its business can be found in
the "Risk" section of Woodside's most recent Annual Report which was released
to the Australian Securities Exchange on 17 February 2022 and in Woodside's
filings with the U.S. Securities and Exchange Commission. Further details of
the key risks can also be found in the prospectus issued by Woodside in
connection with its admission to trading on the London Stock Exchange,
available on the Company's website at https://www.woodside.com/investors. You
should review and have regard to these risks when considering the information
contained in this announcement.

 

It is believed that the expectations reflected in this announcement are
reasonable but they may be affected by a wide range of variables that could
cause actual results to differ materially from those currently anticipated.
Past performance is no guide to future performance.

 

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. All
information included in this announcement, including any forward-looking
statements, speak only as of the date of this announcement and, except as
required by law or regulation, Woodside does not undertake to update or revise
any information or forward-looking statements contained in this announcement,
whether as a result of new information, future events, or otherwise.

 

All figures are for the year ending 31 December 2022, unless otherwise stated.

 

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 or its
applicable subsidiaries.

 1  (#_ftnref1) Indicative, not guidance. Based on current forecasts and
subject to assumptions and uncertainties.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCFIFFEFSISLIV