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

Wednesday, 18 October 2023

THIRD QUARTER REPORT FOR PERIOD ENDED 30 SEPTEMBER 2023

Woodside CEO Meg O'Neill said the quarter-on-quarter increase in output to 47.8 million barrels of oil equivalent was underpinned by strong operating results at Pluto LNG.

"The 99.9% reliability achieved at Pluto during the third quarter followed the completion of a maintenance turnaround in June.

"Production from North West Shelf was impacted by planned turnaround and maintenance activities in the quarter, but the facility's reliability was still exceptional at 98.9%.

"Woodside's project teams made strong progress over the course of the quarter.

"In September, first production at the Shenzi North tieback in the US Gulf of Mexico was achieved ahead of the original 2024 schedule. Production at Mad Dog Phase 2 offshore Louisiana, which started up in April, continued to ramp up during the quarter.

"Activity at Scarborough and Pluto Train 2 increased as planned and the project is now 46% complete. Installation of the nearshore component of the Scarborough trunkline commenced and fabrication of the floating production unit topsides and hull continued.

"Site construction works for Pluto Train 2 are progressing and we have awarded the engineering, procurement and construction contract for the Pluto Train 1 modifications that will allow it to process Scarborough gas.

"The Federal Court's 28 September decision that the Commonwealth Environment Plan for the Scarborough offshore seismic survey is invalid has not impacted our target for first LNG cargo in 2026. The decision does however highlight the urgent need for reform of Australia's offshore approvals process.

"Uncertainty over approvals has the potential to add cost and delays to any offshore activities to be undertaken in Australia. In the case of gas projects, such uncertainty threatens the delivery of much-needed new supplies to the Western Australian domestic market, as well as undermining the confidence of our regional trading partners.

"The importance of Scarborough to regional energy security was demonstrated in August when LNG Japan agreed to purchase a 10% non-participating interest in the joint venture.

"As part of a broader strategic relationship, Woodside and LNG Japan, owned by Sumitomo Corporation and Sojitz Corporation also entered into a non-binding heads of agreement for the sale and purchase of approximately 0.9 million tonnes per annum of LNG for 10 years commencing in 2026. In addition, we entered into non-binding agreements with Sumitomo and Sojitz to collaborate on new energy opportunities globally.

"At Sangomar in Senegal, another two of the 23 planned wells were drilled, taking the total now completed to 14. Pre-commissioning work at the floating production storage and offloading vessel continued in Singapore. Overall, the Sangomar project is 90% complete and we remain on track for targeted first oil in mid-2024.

"A significant milestone for our deepwater Trion project was passed during the quarter, with the approval of the field development plan by the Mexican regulator. Project execution activities at Trion are progressing.

"In new energy, progress was made on contracts for the plant construction scope and other critical packages at our proposed H2OK facility in Oklahoma. Technical work to support readiness for a final investment decision at H2OK is expected to be completed in 2023, although a decision itself has been delayed, pending clarification of government tax incentives and the finalisation of offtake agreements.

"During the quarter we signed two non-binding memoranda of understanding with a total of four Japanese companies to jointly study potential carbon capture and storage (CCS) value chains between Australia and Japan. We believe that with collaboration between industry partners and governments CCS could provide a pathway to help our Japanese customers decarbonise," she said.

Comparative performance at a glance

Operational overview

Production

·      Production increased compared to the previous quarter to 47.8 MMboe primarily due to:

o  higher production from Pluto LNG and Ngujima-Yin following completion of planned turnaround and maintenance activities

o  high LNG reliability at Australian operated assets, with Pluto LNG and the North West Shelf (NWS) Project achieving 99.9% and 98.9% reliability respectively for the quarter

o  higher production on Mad Dog due to the continued ramp up at the Argos platform.

This was partly offset by lower NWS production due to planned turnaround and maintenance activities on the North Rankin Complex, Goodwyn Platform and Karratha Gas Plant, with production recommencing in September 2023.

·      Production from Bass Strait was lower than the corresponding quarter in 2022 due to lower gas demand following a warmer winter.

Gulf of Mexico

·      First production was successfully achieved at Shenzi North in September 2023 ahead of the 2024 target.

·      A maintenance turnaround of the Shenzi facility was completed on schedule.

·      Production continues to ramp up at the Argos platform with seven wells now online.

Australia Oil

·      The Ngujima-Yin FPSO recommenced production in July following successful completion of the five-yearly maintenance turnaround in a Singapore drydock.

Greater Angostura

·      In July 2023, a valve bolt failure on the Angostura gas export platform resulted in an unplanned gas release and emergency shutdown to stop the flow of gas. This incident is classified as a Tier 1 process safety event.[3] Production recommenced in August 2023 following completion of safety checks and remediation activities.

Decommissioning

·      The Enfield plug and abandonment (P&A) campaign continued with four wells permanently plugged. The plugging of 17 of 18 Enfield wells and removal of 16 of 18 xmas trees has been completed.

·      The Bass Strait P&A operations on Flounder, Bream A, and Kingfish A platforms continued with six wells plugged in the quarter.

·      Subsequent to the quarter, Woodside commenced removing the Nganhurra riser turret mooring which will be transported for cleaning and deconstruction in preparation for recycling or reuse.

Project and development activities

Scarborough

·      Installation of the trunkline nearshore component commenced and fabrication of the FPU topsides and hull continued.

·      The Pluto Train 2 project continued to ramp up, with both module fabrication and site construction works progressing.

·      In August 2023, Woodside entered into an agreement with LNG Japan to sell a 10% interest in the Scarborough Joint Venture.[4]

·      In September 2023, Woodside awarded the engineering, procurement and construction contract for Pluto Train 1 modifications. Engineering and procurement of long-lead items are progressing.

·      The Federal Court has set aside NOPSEMA's acceptance of the Marine Seismic Survey Environment Plan on the basis that NOPSEMA's decision to accept the environment plan with conditions relating to consultation was invalid.

·      Engagement continues with NOPSEMA on the outstanding Commonwealth Environment Plans.

·      The Scarborough and Pluto Train 2 project was 46% complete at the end of the period and first LNG cargo is targeted for 2026.

Sangomar Field Development Phase 1

·      FPSO topsides integration and pre-commissioning works continued in Singapore.

·      The development drilling program continued with 14 of 23 wells completed.

·      The subsea installation campaign was 80% complete, with the overall subsea work scope 96% complete at the end of the period.

·      The project was 90% complete at the end of the period and first oil is targeted for mid-2024.

Trion

·      The Mexican regulator, Comisión Nacional de Hidrocarburos, approved the Trion FDP in August 2023.

·      Awarded contracts for the drill rig; FPU and floating storage and offloading (FSO) installation; subsea trees and control system; subsea flexible piping and riser terminations.

·      Placed equipment orders for umbilical tubing and subsea manifolds.

·      Commenced FSO front-end engineering design activities and progressed shipyard engineering.

New energy and carbon solutions

H2OK

·      The H2OK FID has been delayed pending more certainty regarding Government tax incentive qualifications and customer offtake agreements.

·      Technical work to support FID readiness remains on target to be complete in 2023.

·      Contracting activities for the plant construction scope and other critical packages continued.

Woodside Solar

·      Installation works within the Pluto LNG facility have been substantially completed in readiness for power import.

·      Engagement continues with local, state and commonwealth authorities on key development and environmental approvals.

·      Progressed commercial agreements including for the solar farm and battery energy storage system infrastructure required for the power opportunity.

·      Woodside Solar is targeting FID readiness in 2023.

Carbon origination

·      In August 2023, Woodside entered into an agreement for the offtake of carbon credits from the restoration of up to 7,000 hectares of mangroves in the Sine Saloum and Casamance regions of Senegal. Woodside is expected to receive up to 1.4 million carbon credits from this project over 30 years.

CCS opportunities

·      Entered into two non-binding memoranda of understanding with Japanese companies to enable studies of potential carbon capture and storage value chains between Japan and Australia.

Corporate activities

Hedging

·      Woodside has placed oil price hedges for approximately 21.8 MMboe of 2023 production at an average price of approximately $74.5 per barrel, of which approximately 16.5 MMboe has been delivered. As at the end of the period, Woodside hedged approximately 29.3 MMboe of 2024 production at an average price of approximately $75.7 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 and Title Transfer Facility (TTF) commodity swaps. Approximately 77% of Corpus Christi volumes for the remainder of 2023, approximately 41% of 2024 and approximately 4% of 2025 volumes have reduced pricing risk as a result of hedging activities.

·      The year-to-date pre-tax expense related to hedged positions is approximately $248 million, with $146 million pre-tax expense related to oil price hedges, $73 million pre-tax expense related to Corpus Christi hedges and $29 million pre-tax expense related to other hedge positions.

Investor Briefing Day 2023

·      Woodside's Investor Briefing Day 2023 will be held in Sydney, Australia, on Wednesday, 8 November 2023, commencing at 09.30 AEDT / 06.30 AWST (16.30 CST on Tuesday, 7 November 2023).

·      A live webcast of the event will be available at https://webcast.openbriefing.com/wds-id-2023/

Update to 2023 full-year guidance

Woodside's full-year 2023 production and capex guidance has been updated.

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

Production summary

Product sales

Revenue (US$ million)

Realised prices

·      Average realised price for pipeline gas was A$6.1/GJ in Western Australia, A$12.3/GJ in east coast Australia and $3.75/Mcf for International in Q3 2023.[24]

Expenditure (US$ million)

Key project expenditure (US$ million)

Exploration

·      In the US Gulf of Mexico, the Spinel well (non-operated) completed drilling in August 2023. The well did not encounter hydrocarbons.

·      Woodside drilled the Gemtree well in Australia. The well was unsuccessful, encountering minor gas shows in the primary target.

Exploration or appraisal wells drilled

Permits and licences

Key changes to permit and licence holding during the quarter ended 30 September 2023 are noted below.

Production rates

Average daily production rates (100% project) for the quarter ended 30 September 2023:

Forward looking statements

Disclaimer and important notice

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, guidance with respect to production, expectations regarding future capital commitment, future results of projects, operating activities, new energy products, expectations and plans for renewables production capacity and investments in, and development of, renewables projects. 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', 'forecast', '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. The information and statements in this announcement about Woodside's future strategy and other forward-looking statements are not guidance, forecasts, guarantees or predictions of future events or performance, but are in the nature of aspirational targets that Woodside has set for itself and its management of the business. Those statements and any assumptions on which they are based are only opinions and 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 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, fluctuations in commodity prices; actual demand; 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; 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; approvals; cost estimates; 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, prevailing exchange rates and interest rates and conditions in financial markets.

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 released to the Australian Securities Exchange and London Stock Exchange, and in Woodside's most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission 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 announcement.

If any of the assumptions on which a forward-looking statement is based were to change or be found to be incorrect, this would likely cause outcomes to differ from the statements made in this announcement.

All forward-looking statements contained in this announcement reflect Woodside's views held as at the date of this announcement and, except as required by applicable law, Woodside does not intend to, undertake to, or assume any obligation to, provide any additional information or update or revise any of these statements after the date of this announcement, either to make them conform to actual results or as a result of new information, future events, changes in Woodside's expectations or otherwise.

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.  None of Woodside nor any of its related bodies corporate, nor any of their respective officers, directors, employees, advisers or representatives, nor any person named in this report or involved in the preparation of the information in this report, makes any representation, assurance, guarantee or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward-looking statement, or any outcomes, events or results expressed or implied in any forward-looking statement in this report.

Past performance (including historical financial and operational information) is given for illustrative purposes only. It should not be relied on as, and is not necessarily, a reliable indicator of future performance, including future security prices.

All figures are Woodside share for the quarter ending 30 September 2023, 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.

Other conversion factors

The LNG conversion factor from tonne to boe is specific to volumes produced
at each facility and is based on gas composition which may change over time.