Shares in Woodside Energy (ASX: WDS) were trading flat at the open despite the oil and gas giant reporting record high production of 193.9 million barrels of oil equivalent (MMboe), or 530 Mboe/day for FY24.
Output was boosted by the new Sangomar oil project that came into production off the coast of Senegal.
What took the tarnish off that accolade was weaker commodity prices, which resulted in a 13% fall in core profit to $2.88 billion.
However, what gave shareholders something to smile about was a final dividend of US53c per share, bringing the full year payout to US122c, which despite being well down on the US140c it paid in FY23, was still a 10% beat on expectations.
Including one-off items, Woodside’s net profit after tax was up 115% to US$3.57 billion from US$1.66 billion when the result was hit by impairments on fields in WA and the US.
Woodside’s CEO Meg O’Neill told the market that the company is set to become a highly cash-generative business.
“Woodside begins 2025 with a strong balance sheet, a resilient and high-performing base business and an attractive portfolio of projects which position us to deliver value-accretive growth and shareholder returns,” she said.
North West shelf
While Woodside secured approval last December from the WA government to extend the life of its North West Shelf venture – an investment in low-carbon energy – it is still waiting for endorsement from federal environment minister Tanya Plibersek.
O’Neill recently vocalised her frustration with delays and inferred that decision bottlenecks may impact the company’s future expansion plans in Australia.
“We are at the point where we are looking at business decisions that are ahead of us, things like drilling new wells to bring new gas to market, particularly the domestic market which needs it as early as 2028,” said O’Neill.
Other key numbers in Woodside’s FY24 results:
- Operating cash flow of US$5.8 billion, slightly weaker than consensus of US$6 billion.
- Sales dipped 6% to $US13.18 billion.
- Unit production costs of $8.1/boe were down 2% from 2023.
- Cash margin was 82%, up from 80% in 2023.
- Sangomar contributed around $950 million in revenue.
- $2.3 billion in cash proceeds.
Outlook
O’Neill told investors today that the company’s large Scarborough gas project in WA is now 80% complete and remains on track to ship its first cargo in 2026.
The Trion offshore project in Mexico is more than 20% complete and targeted for start-up in 2028.
The company is also progressing on its two large new projects on the Mexican Gulf Coast, including the Louisiana LNG venture, which O’Neill expects to be ready for a final investment decision "from the first quarter of 2025”.
In an attempt to share costs and risks the company is looking to reduce its 100% ownership and O’Neill reminded the market the venture is “attracting interest from high-quality partners".
Currently 83% complete, the Beaumont ammonia project under construction in Texas is on track to start in the second half of the year.
Woodside has a market cap of $44.9 billion making it the ASX’s 13th largest stock; the share price is down 21% in one year and down 3.8% year to date.
According to multiple indicators, the stock's shares are in a long-term bearish trend.
However, the stock appears to have recently broken the downtrend line that has been in place since 2023.
Consensus is Moderate Buy.
The share price was up 2.2% during early afternoon trading to $23.91.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
