Woodside future earnings are underpinned by high-quality cash generating operating assets under development

About Woodside Energy Group Limited

Woodside Energy Group Limited (Woodside, the Group) was founded in 1954 and today is Australia’s largest oil and gas company. In June 2022 Woodside merged with BHP Petroleum and its focus is the exploration, discovery, development and extraction of oil and natural gas all over the world.

Three world class projects in execution

Woodside has three high-quality production projects currently in execution – Sangomar, Scarborough Pluto Train 2, and Trion. These are material projects in their own right, with first oil from the Sangomar deepwater floating production, storage and offloading facility produced in June this year. Scarborough and Trion will deliver production in 2026 and 2028 respectively.

Scarborough is now 50 percent complete, and the Pluto Train 2 project is on track to meet the first LNG cargo delivery target of the project in 2026. The Trion field is a greenfield development located in the Gulf of Mexico and would be the first oil production from Mexico’s deepwater, with potential for future discoveries to be tied back to Trion facilities.

These projects will deliver profitable production that will provide shareholder value well into the 2030s as Woodside’s existing Nort West Shelf production matures and resources decline. Woodside also has a suite of infill and near field development opportunities, that leverage the benefit of existing infrastructure.

History of strong shareholder returns through the commodity price cycle

Woodside has a demonstrated history of impressive operational performance of low-cost producing assets that support a resilient business, that has maintained strong shareholder returns through the commodity price cycle. Woodside’s dividends are fully franked, and projects in execution today will support dependable cash generation in the future to deliver both capital growth and fully franked dividends.

Woodside’s dividend policy is to target 50 to 80 percent of underlying profit and over the last decade it has consistently paid at the top end of the range. The Group maintains an investment grade credit rating, that enables access to debt at a competitive rate. Gearing is targeted in the range of 10 to 20 percent through the cycle and currently sits at about 11 percent.

Woodside is well placed in the next four years to consider making additional returns to its shareholders through special dividends and share buybacks as capital expenditure peaks.

The Future

Oil and gas demand is expected to remain strong out to 2050 and energy production facilities that are operational today and under development, will not meet future demand. Importantly, there is no single energy source can meet the world’s future demand for energy. This is why natural gas, particularly LNG, will play a key role in energy security for decades to come.

In the medium term, the global LNG market remains structurally in short supply, especially in the Asia Pacific region. LNG spot prices remain well above long-term averages and volatility remains high, implying vulnerability of markets to demand and/or supply shocks. Significant ongoing investment is required to ensure markets remain in balance into the next decade, however rising financing and construction costs are challenging new investment in supply globally. With most new supply coming from non-Asia-Pacific sources, Asia-Pacific markets are likely to continue to be the premium global market and a source for strong demand for Woodside’s Australian assets.

In the long term, global demand for energy is driven by expected rises in population and GDP, as countries outside the OECD strive to grow their economies and improve their standards of living. This demand comes with a need to provide affordable, reliable, and lower carbon energy supply. Woodside is an integral component of this equation and has the balance sheet flexibility and operational capacity to continue to meet its customers’ requirements and deliver long-term shareholder value.