Australia’s Woodside Energy, who merged with BHP Petroleum in June posted stellar full-year net profit more than trebled to a record in 2022 as oil and gas prices soared. The merger saw almost double production. The company also took control of Exxon Mobil’s 50 percent interest in the Scarborough gas field off Western Australia doubling their gas production. Woodside’s core net profit, jumped to $US5.23 billion in the year ended December 31, up 223 per cent from 2021, though less then market consensus. Bottom-line profit rose 228 per cent to $US6.5 billion on sales that increased 142 per cent to $US16.8 billion.
Woodside December Quarter 2022 Earnings
Highlights
- Core net profit rose to $US5.23 billion in the year ended December 31, up 223 per cent from 2021 but shy of the market consensus.
- Bottom-line profit rose 228 per cent to $US6.5 billion on sales that increased 142 per cent to $US16.8 billion.
- Woodside produced 157.7 million barrels of oil equivalent in the 12 months through December
- Delivered record quarterly production of 51.6 MMboe (561 Mboe/day), up 0.7% from Q3 2022.
- Delivered sales volume of 52.2 MMboe, down 8.5% from Q3 2022, primarily due to reduced third-party trades
- The average price Woodside received for its products rose 63% to $US98.40 per barrel of oil equivalent.
- Sold 29% of produced LNG at prices linked to gas hub indices (23% full year 2022)
- Woodside declared a final dividend of $US1.44 a share, up from $US1.05 a share at the same time last year. The full-year payout to shareholders totaled $US4.8 billion.
- Woodside’s tax and royalty payments in Australia more than tripled in the year to $2.7 billion, up from $700 million in 2021.
- Forecasting total capex this coming year of between $US6 billion and $US6.5 billion.
Woodside Energy chief executive Meg O’Neill described 2022 as “momentous” for the company, pointing to the deal with BHP, where Woodside has delivered a targeted $US400 million in synergies ahead of schedule.
Chief executive Meg O’Neill described 2022 as “momentous” for the company, pointing to the deal with BHP, where Woodside has delivered a targeted $US400 million in synergies ahead of schedule.
“Throughout the year we took steps to maximize our exposure to favorable prices, expanding our global marketing presence and increasing trading activities,” she said.
Hedging
• As at 31 December 2022, Woodside has placed oil price hedges for approximately 21.8 MMboe of 2023
production at an average price of $74.5 per barrel.
• Woodside also has a hedging program for Corpus Christi LNG volumes to protect against downside
pricing risk. These hedges are Henry Hub and Title Transfer Facility (TTF) commodity swaps. As at
31 December 2022, approximately 49% of Corpus Christi volumes included in stock in transit for 2022,
approximately 82% of 2023 volumes and approximately 29% of 2024 volumes have reduced pricing risk
as a result of hedging activities.
• The realised value of hedged positions for the year ended 31 December 2022 is a pre-tax expense of
approximately $872 million, with $475 million pre-tax expense related to oil price hedges, $384 million pre- tax expense related to Corpus Christi hedges and $13 million pre-tax expense related to other hedge
positions. Hedging losses will be included in “other expenses” in the full-year financial statements.
Australian LNG
• The second phase of Pyxis Hub was successfully completed with ready for start up (RFSU) of Xena-2
achieved on schedule and under budget in November 2022.
• Woodside and NWS Project participants signed non-binding agreements with Western Gas for processing
2-3 Mtpa of Equus gas from 2027, initially through the Karratha Gas Plant and then later through Pluto
LNG. Discussions continue with other resource owners for processing of additional third-party gas.
Gulf of Mexico
• Drilling of the second development well completed on the Shenzi North project in the Gulf of Mexico and well completion operations commenced. The project was 42% complete at the end of the period.
Australia Oil
• The Pyrenees Phase 4 infill campaign commenced during the period, with final completion of the
campaign expected in Q1 2023. The infill campaign is targeting one workover well and one infill well and
is expected to increase recovery from the Crosby and Stickle fields.
• The Enfield plugging and abandonment (P&A) campaign continued with four wells permanently plugged and one xmas tree removed in the quarter. In 2022, a total of five wells were permanently plugged and 13 xmas trees were removed.
• The Balnaves P&A campaign consisting of four wells was completed.
Outlook
Looking to 2023, O’Neill said Woodside expects further progress on growth projects, including at the Trion oil project in Mexico that was part of BHP’s portfolio, and which was originally intended to get the go-ahead for construction last year. The company is progressing its Sangomar oil project in Senegal and its huge $16.5 billion Scarborough LNG project in Western Australia, which are due to start production in late 2023 and 2026, respectively.
Development drilling program progressed on Sangomar with seven of 23 wells complete. The
Sangomar FPSO was successfully relocated to Singapore to complete topsides integration, pre-
commissioning and commissioning activities
Woodside expects output to rise again in 2023, with management on Monday reaffirming a target of 180 million-190 million BOE.
Woodside has yet to secure all the secondary approvals it needs to develop the offshore Scarborough gas field, a process that has been made more stringent after an unexpected court ruling on rival Santos’ Barossa gas project in the Timor Sea.
Low Carbon Energy
Woodside is also preparing to take a final investment decision on its H2OK hydrogen project in Oklahoma. This would be the first major project sanctioned under its commitment to invest $US5 billion in “new energy” and low-carbon products by 2030.
Woodside has spent about $US100 million on potential new opportunities in low-carbon energy. It is forecasting total capex this coming year of between $US6 billion and $US6.5 billion.
Scarborough Field
With the deal Woodside increases its stake in Scarborough to 75 percent and becomes the operator of the gas field. In return for clearing the way $BHP has the option to buy into the Scarborough development on terms similar to those reached with Exxon.
The Scarborough field consists of three natural gas fields of more than 9 trillion cubic feet of dry gas. Upon completion of the acquisition, Woodside estimates its net share of resources more than doubles. BHP said last month it was anticipating bids for its onshore U.S. shale natural gas holding during the first half of the year.
The Scarborough and Pluto Train 2 projects in Western Australia are now 25% complete, with
manufacturing of the export trunkline 59% complete and the commencement of module
construction for Pluto Train 2.
Source: Woodside
From a Sunburnt Country