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 flow5
|
$million
|
560
|
6,546
|
(91%)
|
Annual sales volume
|
MMboe
Mboe/d
|
201.5
552
|
168.9
463
|
19%
|
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/
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
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).
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
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).
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).