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, 24 January 2024

FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2023

Woodside CEO Meg O'Neill said production in the fourth quarter remained strong, taking 2023 full-year production to a record 187.2 MMboe.

"Our expanded global portfolio delivered record production in 2023. Fourth quarter production reflected the completion of planned turnaround and maintenance activities at the North West Shelf and Shenzi. Pluto LNG also maintained its strong production performance, again achieving 99.9% reliability during the period.

"Sales revenue was 3% higher than the third quarter at $3,355 million due to higher realised prices.

"Woodside's growth projects are being delivered as planned. We have strong momentum on the Scarborough Energy Project following receipt of regulatory approvals in December for key offshore work scopes. We've already completed the seismic survey, nearshore pipelay installation is almost complete and we've commenced pipelay work in Commonwealth waters. Earlier this month, we spud the first production well in our drilling program.

"Fabrication of six of the 51 modules for Pluto Train 2 has been completed and work on another 38 is underway. We remain on track for targeted first LNG cargo in 2026.

"The Léopold Sédar Senghor floating production storage and offloading facility departed Singapore at the end of December and is scheduled to arrive offshore Senegal in the coming weeks. Seventeen wells have now been completed at Sangomar, with first oil targeted for mid-2024.

"At Trion in Mexico, contracts have been awarded for the wellheads, subsea line pipe and coatings, and the shore base. Procurement for the subsea equipment and floating production unit commenced during the quarter.

"In the US Gulf of Mexico, following an appraisal well drilled in the second quarter, a final investment decision (FID) was taken on the Mad Dog Southwest Extension, which will be a three-well tieback to the Argos facility.

"In our new energy projects, design optimisation and technical work continued in support of FID readiness at H2OK in Oklahoma. We are evaluating the production tax credit guidance provided by the US Federal Government.

"In Western Australia, planning approvals and State and Federal environmental approvals were secured for the proposed Woodside Solar Project near Karratha.

"Woodside is safely executing our significant decommissioning program. We achieved a milestone with the safe removal of the Nganhurra riser turret mooring and we have commenced the Stybarrow and Griffin decommissioning campaigns. 

"In Marketing, two term LNG sales and purchase agreements were signed during the quarter. First, with Mexico Pacific Limited for the purchase of 1.3 Mtpa of LNG from its proposed third train at the Saguaro Energia LNG Project on the Mexican Pacific coast. Second, with Australian mining company Pilgangoora Operations Pty Ltd for the supply of domestic LNG from the Pluto Truck Loading Facility, further demonstrating Woodside's commitment to Australian domestic gas.

"Woodside welcomes the certainty provided by the ministerial exemption received in January under the domestic gas price cap legislation.  We have consistently provided gas to domestic customers on reasonable prices and terms, and the exemption reflects our ongoing commitment to this objective.

"Woodside confirmed in December that it was in discussions regarding a potential merger with Santos Ltd. The talks are still at an early stage and there is no certainty that the transaction will progress. Woodside will be disciplined, conduct thorough due diligence, and will only pursue a transaction that is value-accretive for shareholders.

"As we complete our first full reporting year after the merger with BHP Petroleum, we are pleased with the results of our strong combined portfolio," she said.

Comparative performance at a glance

Operational overview

Production

·      Delivered quarterly production of 48.1 MMboe, in line with Q3 2023, following completion of planned turnaround and maintenance activities on North West Shelf (NWS) and Shenzi in the third quarter. This was offset by lower production from Bass Strait due to planned onshore and offshore maintenance works and lower gas demand during summer. 

·      Production at NWS was lower than the corresponding quarter in 2022 primarily due to natural field decline.

·      Achieved 99.9% reliability at Pluto LNG for the quarter.

Other

·      Took FID on the Mad Dog Southwest Extension in the US Gulf of Mexico (GoM). This will be a three well tie back to the Argos facility.

·      Ramp up of Mad Dog Phase 2 continued with remediation of the riser flex joints now completed. 

·      Subsequent to the quarter, the NWS project participants took FID on the Lambert West Project, supporting ongoing production from NWS.

Project and development activities

Scarborough Energy Project

·      The Scarborough and Pluto Train 2 project was 55% complete at the end of the period and first LNG cargo is targeted for 2026.

·      Fabrication of the FPU hull and topsides progressed, with the hull being prepared for drydock departure in Q1 2024.

·      Pluto Train 2 module fabrication and site construction works continued. Fabrication of six out of 51 modules is complete and work on another 38 is underway.

·      In December 2023, secondary environment approvals for the drilling, subsea and trunkline installation activities were accepted by the regulator. Installation of the trunkline nearshore component is nearing completion, and pipeline installation in Commonwealth waters commenced.

·      The offshore seismic survey environmental approval was also granted, and the activity was completed.

·      Subsequent to the quarter, installation of the first subsea flowline commenced and the first production well was spud.

Sangomar Field Development Phase 1

·      The project was 94% complete at the end of the period, and first oil is targeted for mid-2024.

·      The FPSO sailed away from Singapore on 22 December 2023 following completion of topsides integration and pre-commissioning works.

·      The development drilling program continued with 17 of 23 wells completed.

·      The subsea installation campaign is ongoing, with the overall subsea work scope 98% complete at the end of the period.

Trion

·      The floating storage and offloading vessel FEED and shipyard engineering continued.

·      Contracts were awarded for the wellheads, subsea line pipe and coatings, and the Mexico shore base.

·      Detailed engineering by the subsea equipment suppliers and the FPU engineering, procurement and construction contractor progressed, enabling the commencement of procurement activities in the quarter.

Liard

·      Woodside completed a transaction bringing Paramount Resources Ltd (Paramount) into the Liard field, located onshore British Columbia Canada. Both parties will have an equal 50% interest in all the leases and Paramount will assume operatorship.

·      Woodside joined the Rockies LNG Partnership as a potential natural gas supplier to the Ksi Lisims LNG Project on the west coast of British Columbia.

Browse

·      In December 2023, the Western Australian Environmental Protection Authority published Woodside's response to the proposed Browse to NWS Project's environmental review document.

Calypso

·      Woodside continued pre-FEED engineering studies to mature both technical definition and cost estimates of the development. Marketing and commercial discussions to evaluate options to monetise the resource are ongoing.

Sunrise

·      In November 2023, the Timor-Leste Government announced its support for the Sunrise Concept Study to proceed. The study will consider the key issues for developing, processing and marketing gas via both Timor-Leste and Australia based solutions.

Decommissioning

·      The Nganhurra riser turret mooring was successfully removed from its location off the North West Cape in Western Australia and transported to Perth to be cleaned and dismantled in preparation for recycling and reuse.

·      All 18 Enfield wells have now been plugged and 16 of the 18 xmas trees have been removed. The remaining two trees are expected to be recovered in the first half of 2024, along with the wellhead severance program.

·      Environmental approvals were obtained in December to progress in-field Griffin decommissioning activities.

·      The Endurance drill rig arrived in Dampier and preparations are underway to commence the Stybarrow well plug and abandonment.

Marketing and Trading

·      In December 2023, Woodside signed a sale and purchase agreement (SPA) with Mexico Pacific Limited to purchase 1.3 Mtpa of LNG, equivalent to approximately 18 cargoes per year, for 20 years.[4]

·      Woodside has reached agreement with three Australian maritime unions on the Australian crewing of an LNG vessel. Under the agreement, the maritime unions will cooperate fully with Woodside and its contractors in maintaining maritime operations at the NWS and Pluto LNG Projects.[5]

·      In October 2023, Woodside exported a cargo of US crude to Europe, utilising access to storage and loading infrastructure acquired previously. This infrastructure will allow Woodside to optimise the timing and pricing of sales.

·      Woodside signed an SPA with Pilgangoora Operations Pty Ltd for the supply of domestic LNG from the Pluto Truck Loading Facility. Supply under the SPA is contracted to commence in the fourth quarter of 2024 for a period of five years.[6]

·      Subsequent to the quarter, Woodside was granted an exemption under the domestic gas price cap legislation applicable to the east coast of Australia. The exemption is for the expected delivery of more than 260 PJ (100% share) of additional domestic gas through to 2033.

New energy and carbon solutions

H2OK

·      Woodside signed a water agreement with the City of Ardmore, Oklahoma to provide wastewater to H2OK and commenced engineering design work for the water pipeline. 

·      Design optimisation and supporting technical work continued in support of FID readiness.

·      Woodside is evaluating the proposed US Federal Government tax incentive criteria which was released for comment in December 2023.

Woodside Solar

·      Received planning approvals and State and Federal environmental approvals for the proposed Woodside Solar Project at the Maitland Industrial Area.

·      In December 2023, Woodside entered into a conditional agreement under which a third party will develop the proposed solar facility and supply renewable energy from the facility to Woodside.

·      Woodside continues to progress commercial agreements, including for power transmission, to support the proposed project.

CCS opportunities

·      Commenced pre-FEED studies for the Angel carbon capture and storage (CCS) opportunity in November 2023.

·      In December 2023, Woodside announced it had entered into a non-binding memorandum of understanding with four Japanese companies to enable studies of potential CCS value chains between Japan and Australia.

Other renewables

·      Completed FEED on the Capella project, a collaboration between Woodside and Heliogen, in December 2023.

Corporate activities

Hedging

·      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 (HH) and Title Transfer Facility (TTF) commodity swaps. An average of 63% of 2024 and 17% of 2025 Corpus Christi volumes have been hedged.

·      The realised value of hedged positions for the year ended 31 December 2023 is a pre-tax expense of approximately $306 million, with $200 million pre-tax expense related to oil price hedges, $74 million pre-tax expense related to Corpus Christi hedges and $32 million pre-tax expense related to other hedge positions. Hedging losses will be included in "other expenses" in the full-year financial statements.

2023 full-year results and teleconference

·      Woodside's Annual Report 2023, Climate Transition Action Plan 2023 and associated investor briefing will be released to the market on Tuesday, 27 February 2024, and will be available on Woodside's website at http://www.woodside.com/.

·      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, on Tuesday, 27 February 2024 at 10:00 AEDT / 07:00 AWST / 17:00 CST (Monday, 26 February 2024).

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

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

o  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 passcode.

Climate Transition Action Plan presentation

·      Woodside will present its Climate Transition Action Plan 2023 to investors on Tuesday, 12 March 2024.

·      A webcast of the event will be available. Further details of the event including the time and a link to the webcast will be provided prior to the event.

Annual General Meeting

·      Woodside's Annual General Meeting will be held at 10.00am (AWST) on Wednesday 24 April 2024 in Perth, Western Australia. The closing date for receipt of director nominations is 19 February 2024.

2024 full-year guidance

Production

·      Woodside's full-year 2024 production guidance is 185 - 195 MMboe (505 - 533 Mboe/day).

·      The approximate split by product type is:

Capital expenditure

·      Woodside's full-year 2024 capital expenditure guidance is US$5.0 - 5.5 billion, assuming no change to current participating interests.

·      The approximate split by activity area is:

Gas hub exposure

·      Woodside expects approximately 26 - 33% of its 2024 produced LNG to be sold at prices linked to gas hub indices.[11]

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$6.8/GJ in Western Australia, A$13.4/GJ in east coast Australia and $4.4/Mcf for International in Q4 2023.[33]

Expenditure (US$ million)

Key project expenditure (US$ million)

Exploration

·      In the US Gulf of Mexico (GoM), Woodside was the highest bidder on 18 leases in Lease Sale 261. The final award of these leases is pending regulatory approval. 

·      Completed a transaction with Chevron in which Woodside acquired a 30% working interest in 11 Chevron operated leases in the central GoM. In exchange, Chevron acquired a 25% working interest in seven Woodside operated leases in western GoM.

Permits and licences

Key changes to permit and licence holding during the quarter ended 31 December 2023 are noted below.

Seismic and geophysical survey activity

Production rates

Average daily production rates (100% project) for the quarter ended 31 December 2023:

Disclaimer and important notice

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, guidance with respect to production, expectations regarding future capital commitment, future cash flows, future results of projects, operating activities, new energy products, accounting decisions including impairments, commencement dates under supply arrangements, construction and delivery dates, 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 31 December 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.