Woodside Releases Quarter Three 2024 Results

16.10.2024  |  Business Wire

Sangomar fuels record-breaking production

Operations

• Record quarterly production of 53.1 MMboe (577 Mboe/day), up 20% from Q2 2024 due to ramp-up of Sangomar, increased uptime across operated assets including 99.9% LNG reliability at Pluto and increased seasonal domestic gas demand. Full-year production guidance has been narrowed to 189-195 MMboe.
• Quarterly revenue of $3,679 million, up 21% from Q2 2024 primarily due to Sangomar cargo sales and higher average LNG prices.
• Achieved nameplate capacity at Sangomar with gross production rates of 100,000 barrels per day.
• Capitalised on increased gas-hub prices by selling 39% of produced LNG cargoes in the quarter on prices linked to gas hub indices.¹ Full year gas hub guidance has been increased to 33-37% of produced LNG.

Projects

• The Scarborough Energy Project was 73% complete at the end of the quarter, with trunkline installation successfully completed in October. The project is on track for first LNG cargo in 2026.²
• The Trion Project was 15% complete at the end of the quarter and is targeting first oil in 2028.
• Completed acquisition of OCI's Clean Ammonia Project in Beaumont, Texas for an all-cash consideration of approximately $2,350 million, with 80% paid and the remaining 20% to be paid at project completion. The project is targeting first ammonia production from 2025 and lower carbon ammonia from 2026.³

Other

• Completed acquisition of Tellurian and its US Gulf Coast Driftwood LNG development opportunity in October. The project has been renamed Woodside Louisiana LNG.
• Signed a sale and purchase agreement (SPA) with JERA for the supply of approximately 0.4 Mtpa LNG for 10 years.
• Executed 66 PJ of Western Australian gas sales for delivery across 2025 and 2026.
• Successfully completed issuance of $2 billion of senior unsecured bonds to quality debt investors in the US market, with the book peaking at almost four times oversubscribed.

Woodside Energy Group (ASX: WDS) (NYSE: WDS) (LSE: WDS):

Woodside CEO Meg O'Neill said:

"We would like to acknowledge the tragic death in early October of an employee of one of the construction contractors at our Clean Ammonia Project in Beaumont, Texas.

"Safety is our top priority. We are taking steps to understand the circumstances around what occurred and are working closely with local authorities, OCI and the contractor company.

"Our production for the third quarter was a record 53.1 million barrels of oil equivalent. The strong operational performance was underpinned by the accelerated ramp-up of Sangomar and exceptional performance at Pluto LNG and NWS, which recorded 99.9% and 99.2% reliability respectively.

"Our 39% exposure to LNG gas hub indices allowed us to take advantage of increased LNG spot prices in the market over the period, demonstrating the importance of maintaining a balanced and flexible portfolio.

"At Sangomar the 24-well drilling program has been completed and the project has achieved nameplate capacity of 100,000 barrels per day. Commissioning activities continue to progress as planned and start-up of gas and water injection systems is underway.

The Scarborough Energy Project in Western Australia is now 73% complete and remains on target for first LNG cargo in 2026. Installation of the offshore Scarborough gas trunkline was completed in early October.

"At the end of September we completed the acquisition of OCI's Clean Ammonia Project in Beaumont, Texas. Subsequent to quarter end, we completed the acquisition of Tellurian and its development opportunity, now named Woodside Louisiana LNG.

"The Clean Ammonia Project is expected to produce first ammonia in 2025 and at Woodside Louisiana LNG we are targeting final investment decision (FID) readiness from the first quarter of 2025. These acquisitions expand our diverse, geographically advantaged portfolio and position Woodside to execute our strategy to thrive through the energy transition and deliver long-term value to shareholders.

"Our sale and purchase agreement with JERA for the long-term supply of LNG from Woodside's global portfolio again evidenced the value Asian customers place on our product.

"Woodside's commitment to the domestic market was also demonstrated by the execution of gas sales of 66 petajoules (PJ) across 2025 and 2026 in Western Australia. In eastern Australia, to date we have executed sales of 63 PJ across 2025 and 2026 under an ongoing Expression of Interest process, with further sales expected to be completed in the fourth quarter."

Comparative performance at a glance

Operations

Pluto LNG

• Achieved outstanding quarterly LNG reliability of 99.9%.

North West Shelf (NWS) Project

• Achieved outstanding quarterly LNG reliability of 99.2%.
• Successfully completed planned maintenance offshore at North Rankin Complex and an onshore LNG train at Karratha Gas Plant (KGP), and production has recommenced as planned.
• Continued to pursue opportunities for third party onshore gas processing following announcement of the Western Australian Government's updated policy allowing onshore gas exports.
• Took FID on the Low-Low Pressure Operation Project at Goodwyn Alpha, aimed at increasing NWS production from the Goodwyn area reservoirs. This project is targeted for start-up in Q2 2027.
• Planning to bring one LNG train offline for retirement in the fourth quarter of 2024.
  

Bass Strait

• Safely completed the Kipper Compression Project, adding compression facilities on the West Tuna Platform, increasing production potential of existing well stock and enabling development of additional Kipper reserves.
• Continued optimisation of facilities through the Gippsland Asset Streamlining project with closure of the Cobia Platform in September 2024.
• Ethane power generation project successfully started up in September.

Sangomar

• Achieved nameplate capacity of 100,000 barrels per day in July 2024.
• Continued to receive strong interest in Sangomar crude from buyers in Europe and Asia.
• The final Phase 1 well was drilled and completed in the period. The Sangomar drilling campaign is now complete marking the successful drilling and completion of 24 development wells.
• Start-up of gas and water injection systems has commenced and commissioning activities are expected to continue through 2024.

Gulf of Mexico

• Completed a planned shutdown on Shenzi in July 2024 which included integrity inspections and control system improvements.
• Completed a planned three-well intervention campaign on Mad Dog A-Spar.
• In September, Hurricanes Francine and Helene caused deferrals at our operated and non-operated GOM facilities, largely due to availability of third-party infrastructure and planned facility ramp down.

Marketing and Trading

• Signed a long-term LNG SPA with JERA to supply approximately 0.4 million tonnes (six cargoes) of LNG per year over 10 years on a delivered basis, commencing in April 2026. LNG delivered under the SPA will be sourced from volumes across Woodside's global portfolio.
• Sold 39% of produced LNG at prices linked to gas hub indices in the quarter (36% year to date).⁷Full year gas hub guidance has been increased to 33-37% of produced LNG.
• Executed 66 PJ of Western Australian gas sales for delivery across 2025 and 2026. Woodside continues to engage with the Western Australian domestic market on additional supply requirements for 2025, 2026 and 2027.
• Woodside continued its eastern Australian Expression of Interest (EOI) process with executed sales to date already of 63 PJ across 2025 and 2026. The remaining sales under the EOI process are expected to be completed in Q4 2024.

Projects

Scarborough Energy Project

• The Scarborough and Pluto Train 2 project was 73% complete at the end of the quarter.
• 41 of 51 Pluto Train 2 modules have been delivered to site, with 39 modules set in position at the end of the quarter.
• Fabrication of the floating production unit (FPU) hull and topsides progressed, with installation of piping, electrical, and instrumentation packages continuing on the topsides and the hull entering its second dry dock in preparation for FPU integration activities in 2025.
• Trunkline installation was completed subsequent to the quarter.
• The drilling program continued with batch drilling of the development wells ongoing.
• First steel was cut at the module yard on the Pluto Train 1 modifications project and site preparation works at the Pluto LNG facility commenced.
• First LNG cargo is targeted for 2026.

Trion

• The Trion project was 15% complete at the end of the quarter.
• Awarded contracts for the floating, storage and offloading vessel (FSO) bare boat charter, aviation services, and fibre optic trunkline installation.
• Procurement activities continued, including delivery of long lead items to subsea equipment manufacturers.
• Completed the FPU hull 90% model review and initiated FPU pre-construction activities.

Woodside Louisiana LNG (Driftwood LNG)

• Subsequent to the quarter, completed acquisition of Tellurian and its US Gulf Coast Driftwood LNG development opportunity in Calcasieu Parish, Louisiana.
• Woodside acquired all issued and outstanding Tellurian common stock for approximately $900 million cash, or $1.00 per share. The implied enterprise value was approximately $1,200 million.⁸
• Woodside has renamed the Driftwood LNG development opportunity Woodside Louisiana LNG.
• Woodside is targeting FID readiness from the first quarter of 2025.

Decommissioning

• The Griffin, Stybarrow and Enfield decommissioning campaign continued with ~54 km of flexible flowlines and umbilicals recovered in the quarter, and completion of wellhead severance activities at Enfield.
• The well plug and abandonment campaign at the Stybarrow field is 40% complete, with 4 wells plugged and abandoned to date.
• At Mad Dog in US Gulf of Mexico, operator (BP) completed plug and abandonment of well 869-1.

Exploration and development

Calypso

• Pre-front-end engineering design (FEED) engineering studies continued to mature the technical definition and cost estimate for the deepwater infield host.
• Fiscal and marketing negotiations continued with various counterparties to assess the commercial options to monetise the Calypso resource.

Browse

• Additional information was provided to the WA Environmental Protection Authority to support the final phase of assessment of the Browse to North West Shelf Project environmental referral.
• Engineering studies on Browse to North West Shelf Project continue to optimise the upstream development concept and improve project cost and schedule certainty.

Sunrise

• The Sunrise Joint Venture participants continued negotiations with the Australian and Timor-Leste Governments to progress a new Production Sharing Contract, Petroleum Mining Code and fiscal regime.
• The concept study for the potential development of Greater Sunrise is expected to conclude in Q4 2024.
  

Exploration

• In Congo, the Niamou Marine-1 (non-operated) well reached total depth in September 2024. The well did not encounter hydrocarbons.
• In September 2024, Woodside was granted Exploration Permit WA-554-P in the Barrow sub-Basin, Western Australia. WA-554-P comprises a total area of 943 km². Woodside holds a 100% working interest in the permit.
• Subsequent to the period, Woodside acquired a 40% non-operated stake in ENI's Tiba Block in the Nile Delta, Egypt.

New energy and carbon solutions

Beaumont Clean Ammonia Project

• Completed OCI Clean Ammonia acquisition, comprising 100% of OCI Clean Ammonia Holding B.V., which holds its lower carbon ammonia project in Beaumont, Texas.
• The acquisition was for an all-cash consideration of approximately $2,350 million, inclusive of capital expenditure through completion of phase 1 of the project. OCI is continuing to manage the construction of the project under the Construction Management Agreement.
• Woodside is targeting first ammonia production from 2025 and lower carbon ammonia from 2026 following commencement of CCS operations.⁹

H2OK

• Secured non-binding offtake term sheets with several customers and continued to advance pricing and volume discussions with additional offtakers.
• Woodside continues to await final guidance for the 45V Clean Hydrogen Production Tax Credit.

Woodside Solar

• Woodside continued working with the Western Australian Government to progress its process to develop common user transmission infrastructure required to support the proposed Woodside Solar project.

Carbon capture and storage (CCS) opportunities

• Woodside was awarded two greenhouse gas assessment permits to progress CCS evaluation work:
  • G-18-AP, offshore Onslow, Western Australia, as part of a joint venture with Chevron Australia New Ventures Pty Ltd; and
  • G-19-AP, off the coast of Victoria, as part of the Gippsland Basin Joint Venture (GBJV).

Corporate activities

London Stock Exchange listing

• Subsequent to the period, Woodside announced it will delist from the London Stock Exchange (LSE). The last day of trading of Woodside shares on the LSE will be 19 November 2024.

Funding

• Woodside successfully raised $2 billion in the US market through a multi-tranche SEC registered bond in September 2024, comprising a $1.25 billion 10-year bond and a $0.75 billion 30-year bond.
• Woodside converted and upsized an existing $800 million revolving facility to a new $1.2 billion 7-year syndicated term loan primarily from Asian and European banks.

Hedging

• Woodside hedged approximately 29.3 MMboe of 2024 oil production at an average price of approximately $75.6 per barrel, with approximately 72% delivered as of 30 September 2024.
• As at 30 September, Woodside had hedged approximately 18.6 MMboe of 2025 production. An additional 11.4 MMboe was subsequently added with the total for 2025 now 30 MMboe at an average price of approximately $78.75.
• 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 88% of volumes for the remainder of 2024, 83% of 2025 and 25% of 2026 volumes have been hedged.
• The year-to-date realised value of all hedged positions for as of 30 September 2024 is a pre-tax expense of approximately $70 million, with $195 million related to oil price hedges offset by $88 million profit related to Corpus Christi hedges and $37 million related to other hedge positions. Hedging losses will be included in "other expenses" in the full-year financial statements.

Climate and sustainability

• Woodside released its 2023 Reconciliation Action Plan 2021-2025 (RAP) Report. The report reflects Woodside's progress against the four pillars outlined in the RAP including Respect for Culture and Heritage, Capability and Capacity, Economic Participation, and Stronger Communities.
• Subsequent to the period Woodside signed a memorandum of understanding (MOU) with the Japan Organisation for Metals and Energy Security (JOGMEC) regarding collaboration on methane emissions management.

Upcoming events 2024 - 2025

2024 full-year guidance

Production summary

Product sales

Revenue

Realised prices

Average realised price increased 5% from the prior quarter reflecting higher JKM, JCC and TTF.

Capital expenditure (US$ million)

Other expenditure (US$ million)

Exploration or appraisal wells drilled

Permits and licences

Key changes to permit and licence holdings during the quarter ended 30 September 2024 are noted below.

Production rates

Average daily production rates (100% project) for the quarter ended 30 September 2024:

Disclaimer and important notice

Forward looking statements

This report 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 long-term demand for Woodside's products, development, completion and execution of Woodside's projects, expectations regarding future capital expenditures, the payment of future dividends and the amount thereof, future results of projects, operating activities and 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, capital and exploration expenditure and gas hub exposure, and expectations regarding the achievement of Woodside's net equity Scope 1 and 2 greenhouse gas emissions reduction and new energy investment targets and other climate and sustainability goals.

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', 'aspire', '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 report 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 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 for Woodside's 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, the actions of third parties, project delay or advancement, regulatory approvals, the impact of armed conflict and political instability (such as the ongoing conflict in Ukraine and in the Middle East) on economic activity and oil and gas supply and demand, 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, the impact of general economic conditions, inflationary conditions, prevailing exchange rates and interest rates and conditions in financial markets, and risks associated with acquisitions, mergers and joint ventures, including difficulties integrating businesses, uncertainty associated with financial projections, restructuring, increased costs and adverse tax consequences, and uncertainties and liabilities associated with acquired and divested properties and businesses.

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 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 report.

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 report.

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.

All forward-looking statements contained in this report reflect Woodside's views held as at the date of this report 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 report, either to make them conform to actual results or as a result of new information, future events, changes in Woodside's expectations or otherwise.

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.

Other important information

All figures are Woodside share for the quarter ending 30 September 2024, unless otherwise stated.

All references to dollars, cents or $ in this report 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).

Units of measure and 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.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20241015929378/en/

INVESTORS
Marcela Louzada
M: +61 456 994 243
E: investor@woodside.com

MEDIA
Christine Forster
M: +61 484 112 469
E: christine.forster@woodside.com