WDS Woodside Energy Group Ltd

SECOND QUARTER REPORT FOR PERIOD ENDED 30 JUNE 2024

ASX: WDS | NYSE: WDS | LSE: WDS
Tuesday, 23 July 2024

Delivering on our growth strategy

Operations

·      Quarterly production of 44.4 MMboe (488 Mboe/day), down 1% from Q1 2024 due to planned maintenance activities, weather impacts at North West Shelf and unplanned outages at Wheatstone and Julimar, partly offset by higher seasonal demand at Bass Strait and first oil at Sangomar. Full year production guidance remains unchanged.

·      Quarterly revenue of $3,033 million, up 2% from Q1 2024 primarily due to timing of Pluto cargoes partially offset by lower realised prices.

·      Sold 22% of total equity production in the quarter on prices linked to gas hub indices.[1] Full year gas hub guidance remains unchanged.

 

Projects

·      The Sangomar Project achieved first oil in June and production continues to ramp up as planned. Subsequent to the quarter, the first cargo was loaded for delivery to Europe.

·      The Scarborough Energy Project was 67% complete at the end of the quarter, with first LNG cargo expected in 2026.^[2]

 

·      The total estimated cost of the Scarborough Energy Project has increased by 4% to US$12.5 billion (US$8.2 billion Woodside share), significantly driven by scope maturation of the Pluto Train 1 modifications project.^[3]

·      The Trion Project continued to progress engineering, procurement, and contracting activities in accordance with the execution plan.

·      Secured all primary environmental approvals for the Hydrogen Refueller @H2Perth and progressed offtake discussions for the H2OK Project.

 

Other

·      Signed a sale and purchase agreement (SPA) with CPC Corporation, Taiwan (CPC) for the long-term supply of LNG to Taiwan.

·      Secured $1 billion funding from Japan Bank for International Cooperation (JBIC) for the Scarborough Energy Project.

·      Subsequent to the quarter, Woodside entered into a definitive agreement to acquire Tellurian and its US Gulf Coast Driftwood LNG development opportunity for an all-cash payment of approximately $900 million.

 

Woodside CEO Meg O'Neill said the company is on track to achieve its full year production guidance of 185-195 million barrels of oil equivalent (MMboe), with output for the second quarter of 44.4 MMboe.

"The first oil from our Sangomar project offshore Senegal was a significant milestone, delivering against our growth strategy. Subsequent to the quarter, we achieved peak gross rate of 75,000 barrels per day and production ramp-up continues as planned.

"The addition of Sangomar to Woodside's portfolio will deliver enduring shareholder value and significant economic benefits for Senegal.

"Work on our other major growth projects continued at pace. The Scarborough Energy Project in Western Australia is now more than two-thirds complete and we remain on target for first LNG cargo in 2026.

"We are also progressing our opportunities in new energy, securing all primary environmental approvals for the Hydrogen Refueller @H2Perth, while continuing offtake discussions for H2OK in the US.

"We see ongoing demand for Woodside's LNG in Asian markets, as evidenced by our long-term sale and purchase agreement with CPC Corporation, Taiwan, and the $1 billion loan agreement executed with JBIC to fund Woodside's Scarborough Energy Project.

"The recent announcement of an agreement to acquire Tellurian and Driftwood LNG positions Woodside to be a global LNG powerhouse, adding scalable US LNG development exposure to our portfolio," she said.

Comparative performance at a glance

			Q2 2024	Q1 2024	Change %	Q2 2023	Change %	YTD 2024	YTD 2023	Change %
Revenue		$ million	3,033	2,969	2%	3,084	(2%)	6,002	7,414	(19%)
Production[4]		MMboe	44.4	44.9	(1%)	44.5	-	89.3	91.3	(2%)
	Gas	MMscf/d	1,885	1,929	(2%)	1,905	(1%)	1,907	1,999	(5%)
	Liquids	Mbbl/d	157	155	1%	155	1%	156	154	1%
	Total	Mboe/d	488	494	(1%)	489	-	491	504	(3%)
Sales		MMboe	48.0	45.9	5%	48.4	(1%)	93.9	98.8	(5%)
	Gas	MMscf/d	2,103	1,967	7%	2,170	(3%)	2,035	2,268	(10%)
	Liquids	Mbbl/d	159	159	-	151	5%	159	148	7%
	Total	Mboe/d	528	504	5%	532	(1%)	516	546	(5%)
Average realised price		$/boe	62	63	(2%)	63	(2%)	63	74	(15%)
Capital expenditure[5]		$ million	1,233	1,179	5%	1,321	(7%)	2,412	2,637	(9%)

 

Operations

North West Shelf (NWS) Project

·      Achieved strong quarterly LNG reliability of 99.7%.

·      Successfully completed planned offshore maintenance at Goodwyn Alpha (GWA).

·      Progressed the proposed GWA infill development for potential final investment decision (FID) in 2025, which would involve tying back several fields via existing GWA subsea infrastructure.

 

Pluto LNG

·      Achieved quarterly LNG reliability of 97.7%.

·      Successfully completed a two-day turnaround at Pluto LNG to enable integration testing of the produced water handling unit into the Pluto A platform.

·      Increased Pluto domestic gas production through the Pluto-KGP interconnector at the NWS.

 

Wheatstone and Julimar-Brunello

·      Two separate unplanned outages occurred in the quarter, impacting the Julimar subsea production system and the Wheatstone facility respectively. Full production resumed in the quarter. 

 

Bass Strait

·      Completed offshore installation of the Kipper Compression modules, with the project progressing hook-up activities for a planned start-up in Q3 2024.

·      The Gippsland Basin Joint Venture (GBJV) continues to optimise its facilities through the Gippsland Asset Streamlining project with the Halibut platform ceasing production as planned following declining oil production from the facility.

 

Other Australia                                                  

·      Successfully completed the planned five-yearly maintenance turnaround at the Pyrenees floating production storage and offloading (FPSO) facility.

·      A produced-water leak identified in the subsea system at the Pyrenees facility in January was rectified and production recommenced, returning to normal rates this quarter.

 

Gulf of Mexico

·      Achieved quarterly reliability of 98.9% at Shenzi. 

·      Executed a planned major offshore facility turnaround at Atlantis.

·      Achieved first water injection at the Argos platform in April 2024.

Trinidad & Tobago

·      Safely completed a planned facility maintenance turnaround in June 2024 aimed at proactive risk and integrity management and control system upgrades.

 

Marketing

·      Signed a long-term LNG SPA with CPC for the supply of approximately 6 million tonnes of LNG on a delivered basis over 10 years, commencing in July 2024. LNG delivered under the SPA will be sourced from volumes across Woodside's global portfolio. 

·      Sold 45% of produced LNG at prices linked to gas hub indices in the quarter (34% year to date). This represents 22% of Woodside's total equity production (16% year to date). Full year gas hub guidance remains unchanged.

·      Took delivery of a new 174,000m³ long-term charter LNG vessel, the Woodside Scarlet Ibis, which will support efforts to lower the carbon intensity of Woodside's LNG deliveries.

·      Executed 14 PJ of Western Australian gas sales for delivery from May to the end of 2024. Woodside continues to support the Western Australian domestic market by offering additional supply for 2025, 2026 and 2027.

·      Achieved record trucked LNG deliveries of 525 TJ during the quarter to customers in northern Western Australia. Woodside has now delivered more than 2000 trailers of LNG since commencement of operations at the Pluto LNG Truck Loading Facility, offering a lower-carbon alternative to diesel.^[6]

 

Projects

Scarborough Energy Project

·      A cost and schedule review was performed for the integrated Scarborough Energy Project. The schedule remains unchanged, with first LNG cargo targeted for 2026. The revised total project cost estimate is US$12.5 billion (US$8.2 billion Woodside share), a 4% increase from the previous cost estimate at FID of US$12 billion. The cost increase is significantly driven by scope maturation of the Pluto Train 1 modifications project.^[7]

·      The Scarborough and Pluto Train 2 project was 67% complete at the end of the quarter.

·      29 Pluto Train 2 modules have been delivered to site, with 25 modules set in position at the end of the quarter and site works continuing to ramp up.

·      Fabrication of the floating production unit (FPU) hull and topsides progressed. The living quarters module was installed on the topsides, which has achieved structural completion.

·      Trunkline installation has transitioned from the 36" to 32" pipe and is now more than 50% complete.

·      Two development wells have been drilled, with one well completed and the other planned to be completed in H2 2024. Reservoir quality is aligned with pre-drill estimates.

·      Installation and testing of the three flowlines was completed.

·      All major engineering reviews for Pluto Train 1 modifications have been completed and approximately 80% of materials and equipment have been ordered. Mobilisation of personnel to both the module yard and Pluto site commenced.

 

Sangomar Field Development Phase 1

·      Achieved first oil from the Sangomar field in June 2024, marking the delivery of Senegal's first offshore oil project.

·      Finalised sales for initial Sangomar crude cargoes loading in July 2024, receiving interest from European and Asian refiners. The first cargo was loaded subsequent to the quarter.

·      The project was 98% complete at the end of the quarter.

·      The development drilling program continued with 21 of 23 wells drilled and completed. An additional 24th well approved by the joint venture in May 2023 was also drilled and completed in the period.

·      Commissioning activities and the safe ramp up of production are expected to continue through 2024.

 

Trion

·      Awarded contracts for the FPU dry transportation, gas gathering line pipe and drilling equipment and consumables.

·      Progressed FPU engineering, procurement and construction activities with procurement of key equipment and the integration of vendor data into the design.

·      Completed floating, storage and offloading vessel (FSO) front-end engineering design (FEED).

 

Decommissioning

·      The Griffin, Stybarrow and Enfield decommissioning campaign continued with ~50km of flexible flowlines and umbilicals recovered in the quarter. 

·      The final two of 18 xmas trees were removed from Enfield and wellhead severance commenced, with four completed at the end of the quarter.  

·      At Bass Strait, offshore execution of the plug and abandonment of two subsea wells commenced, utilising the Q7000 light well intervention vessel.

·      The GBJV also progressed FEED of the facility preparation scope for removal of platforms no longer in use and continued to execute preparatory decommissioning activities.

 

Exploration and development

Calypso

·      Continued pre-FEED engineering studies to mature the technical definition and cost estimate for the deepwater infield host.

·      Continued fiscal and marketing negotiations with various counterparties to assess the commercial options to monetise the Calypso resource.

 

Browse

·      In June 2024, a Declaration of an Identified Greenhouse Gas Storage Formation was made by the Commonwealth Government over the Calliance Storage Formation within the G-8-AP Greenhouse Gas Assessment Permit (held by Woodside as Operator of Browse). This declaration supports the proposed carbon capture and storage solution incorporated into the Browse design.

 

Sunrise

·      The Sunrise Joint Venture participants continued to work with the Australian and Timor Leste governments to progress a new Production Sharing Contract, Petroleum Mining Code and fiscal regime.

 

Exploration

·      In Congo, the Niamou Marine-1 well spud in May 2024 under the Marine XX joint venture operated by TotalEnergies.

 

New energy and carbon solutions

H2OK

·      Continued to advance discussions with potential offtakers on pricing and volumes.

·      Woodside is awaiting final guidance for the 45V Clean Hydrogen Production Tax Credit.

 

Woodside Solar

·      Working with the Western Australian Government to progress its plans to develop common user transmission infrastructure required to support the proposed project.

·      FID readiness and first solar import will be subject to securing access to this new infrastructure.

 

Hydrogen Refueller @H2Perth

·      Secured primary environmental approvals for the Hydrogen Refueller @H2Perth.

·      Commenced factory acceptance testing for key project equipment packages.

·      Woodside is targeting supply of hydrogen to Western Australian industrial customers in 2025.

 

Carbon capture and storage (CCS) opportunities

·      Continued to progress engineering and marketing activities and required approvals for the Angel CCS project.

Carbon Credits Portfolio

·      Subsequent to the quarter, Woodside signed an agreement to fund the reforestation of 5000 hectares of land in the Chaco region in Paraguay. The Woodside portion of the project is expected to generate approximately 1.6 million carbon credits over 40 years.

 

Corporate activities

Hedging

·      Woodside hedged approximately 29.3 MMboe of 2024 oil production at an average price of approximately $75.6 per barrel, with approximately 49% delivered as of 30 June 2024.

·      Woodside additionally hedged approximately 15 MMboe of 2025 oil production at an average price of approximately $81.2 per barrel.

·      Woodside also has a hedging program for Corpus Christi LNG volumes designed to protect against downside pricing risk. These hedges are Henry Hub (HH) and Title Transfer Facility (TTF) commodity swaps. Approximately 70% of volumes for the remainder of 2024, 48% of 2025 and 9% of 2026 volumes have been hedged.

·      The realised value of all hedged positions for the half-year ended 30 June 2024 is a pre-tax expense of approximately $45 million, with $111 million related to oil price hedges offset by $65 million profit related to Corpus Christi hedges and $1 million related to other hedge positions. Hedging losses will be included in "other expenses" in the full-year financial statements.

 

Funding

·      In May 2024, Woodside secured a $1 billion, 10-year loan from JBIC to support the Scarborough Energy Project. This loan was secured at prevailing market rates associated with Woodside's credit rating.

 

Climate and sustainability

·      Woodside's Annual General Meeting (AGM) took place on 24 April 2024, where all resolutions were passed except for the Climate Transition Action Plan and 2023 Progress Report (CTAP), which received a vote of 58.36% against it. Management is reflecting on the results of the CTAP vote.

·      Woodside published its 2023 Social Contribution Impact Report in April 2024 and its 2023 Modern Slavery Statement in June 2024.

·      Woodside hosted a methane masterclass during the Australian Energy Producers (AEP) conference as part of its commitment to the decarbonisation of its activities and to share Woodside's best practices on methane emissions reduction.

2024 half-year results and teleconference

·      Woodside's Half-Year Report 2024 and associated investor briefing will be released to the market on Tuesday, 27 August 2024. It will also be available on Woodside's website at http://www.woodside.com/.

Upcoming events 2024 

August	27	Half-Year 2024 report
September	16	US investor event
October	16	Third quarter 2024 report
2024 full-year guidance     Prior Current Production MMboe 185 - 195 (505 - 533 Mboe/day) No change Capital expenditure[8] $ billion 5.0 - 5.5 No change Gas hub exposure[9] % of produced LNG 26 - 33 No change   Contacts:     INVESTORS MEDIA REGISTERED ADDRESS Marcela Louzada M: +61 456 994 243 E: investor@woodside.com Christine Forster M: +61 484 112 469 E: christine.forster@woodside.com 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   This announcement was approved and authorised for release by Woodside's Disclosure Committee.