Woodside hails record half-year following BHP assets merger

(Alliance News) - Australia's Woodside Energy Group Ltd on Tuesday shared a "record" set of interim results, but scaled back dividend payments as costs climbed.

In the six months ended June 30, the Perth-based energy company said net profit rose 6.1% year-on-year to a record figure of USD1.74 billion from USD1.64 billion.

Diluted earnings per share, however, dropped to 91.1 US cents from 144.0 cents.

For the first half, it declared an interim dividend of 80 cents per share, which was down 27% from the 109 cents payout a year before.

Operating revenue rose 27% to USD7.40 billion from USD5.81 billion, but cost of sales surged 73% to USD3.87 billion from USD2.24 billion.

Woodside recognised additional volume from BHP Group Ltd's former petroleum assets, as well as from the Pluto-KGP Interconnector. This was offset by lower prices and planned turnaround activity, it said.

Woodside and the former BHP petroleum portfolio merged in June last year, turning Woodside into one of the 10 largest independent energy producers in the world.

Total production rose 66% annually to record levels of 99.1 million barrels of oil equivalent, from 54.9 million boe in the first half of 2022.

"The Pluto [liquefied natural gas] facility delivered an outstanding 99.9% reliability rate in the five months prior to the planned maintenance turnaround, which was completed on schedule. First production was achieved at the Argos platform at Mad Dog Phase 2 in the Gulf of Mexico and we expect output from the facility to ramp up over the remainder of the year," said Chief Executive Officer Meg O'Neill.

"During the half a successful appraisal well was drilled in the southwest portion of the Mad Dog field in the Gulf of Mexico and a multi well tie back to Argos is being evaluated."

Last month, Woodside said first oil at the Sangomar floating production storage and offloading facility. offshore Senegal is now expected in mid-2024, following unexpected remedial work. The firm also upped cost estimates by a range of 7% to 13% from its previous estimate.

While this was "disappointing", O'Neill said on Tuesday, Woodside is "confident" that the planned rectifications in the Singapore shipyard "will facilitate a safe and efficient start-up to allow first oil in mid-2024".

O'Neill also noted the recent agreed sale of a 10% stake in its Scarborough interest to LNG Japan Corp. It forms part of a "new strategic relationship" which has the potential for LNG offtake and collaboration on opportunities in new energy.

Woodside left production guidance for 2023 unchanged, still expecting between 180 and 190 million boe, which would be up from the record 157.7 million boe in 2022.

It still expects exploration expenditure of USD300 million to USD400 million, and capital expenditure of USD6.0 billion to USD6.5 billion.

Shares in Woodside were down 0.9% at AUD38.13 in Sydney on Tuesday afternoon.

Woodside is facing a potential strike from unions at its North West Shelf offshore gas platforms as early as September 2, according to Reuters on Sunday.

Staff on rigs owned by Chevron Corp are also considering walking out. Woodside and Chevron's facilities supply around 10% of the global LNG market. The looming threat of strikes has caused volatility in European gas prices.

By Elizabeth Winter, Alliance News senior markets reporter

Comments and questions to [e-mail]

Copyright 2023 Alliance News Ltd. All Rights Reserved.