Woodside Energy Share Discussion Threads

[kiwi2007] 24/7/2024 01:53

Woodside: Guidance Maintained and Sangomar Oil Production Now Ramping

No-moat Woodside reported a robust second quarter 2024, with production down 1% to 44.4 million barrels of oil equivalent, in line with expectations. Planned maintenance at the North West Shelf was partly offset by higher seasonal demand at Bass Strait and first oil from the Sangomar project in Senegal. Average price achievement was down 3% to USD 60 per boe, as anticipated. Our fiscal 2024 earnings per share forecast of AUD 2.23 stands, as does our AUD 45 fair value estimate. Woodside kept all 2024 guidance, including production of 185-195mmboe and capital expenditure of USD 5.0 billion-USD 5.5 billion. We remain at the midpoint for both.

The Pluto T2/Scarborough LNG project was 67% complete at quarter's end and on schedule for first cargoes in 2026. The total project cost has increased by 4% to USD 12.5 billion (Woodside's share is USD 8.2 billion) driven largely by an increase in scope of modifications to the existing Pluto T1. The base modifications will allow up to 3.0 million metric tons per year of Scarborough gas to be processed through T1, which, in conjunction with T2's 5 Mtpa capacity, will enable full utilization of the 8 Mtpa in offshore capacity.

Woodside shares have slipped 5% to around AUD 27.80 over recent days, including the market perhaps expressing some dissatisfaction with Woodside's proposed USD 900 million cash acquisition of Tellurian for its wholly owned Driftwood LNG project on the US Gulf Coast. As discussed in our last note, we think Tellurian seems a reasonable deal, with a low upfront cost and potential to farm out and phase development.

Our Woodside fair value equates to a 2033 enterprise value/EBITDA of 9.9, excluding the USD 3.7 billion lump sum we credit for undeveloped prospects. Ignoring Tellurian and Driftwood, we forecast relatively flat EBITDA over the next decade as lower commodity prices offset production growth via Scarborough. We project a midcycle USD 60 per barrel for Brent crude and USD 8.40 per mmBtu for LNG from 2026.

Probably best value for Aussie shareholders who get them 100% franked.

[anhar] 22/5/2024 12:30

I allocated the correct valuation to my WDS received in the BHP demerger and at present it's down about 14%. For me though, as purely a long term hold income investor who pays little attention to price flucs, the more important figures are the divis and they are far worse.

The 23 payout of US 140¢ is down a nasty 45% from the 253¢ of 22. In more bad divi news, this is predicted to fall again to 115¢ for 24.

The 115¢ is currently worth about 90p so at 1,450p makes a forward yield of 6.2%. That's good so I'll continue to hold in my income port despite the lousy recent divi record. I'm a bit more lenient with the divis from my mining and oil holdings because their payouts are based on a proportion of profits which vary with fluctuating commodity prices. Long term I've found that the divis on average can work out well but require patience to ride out the cycles.

This pattern differs from other industries which have a tendency to increase payments each year.

[garycook] 21/5/2024 00:22

Yes. Underperformed big time. Fair bit of upside value here.12 Month high 2006p .I contacted WDS HR in Australia about the performance of WDS this year, but no response yet.

[kiwi2007] 20/5/2024 22:05

MorningStar:
As of March 31st, Woodside Energy (ASX:WDS) comprised over 6% of Dimensional’s Gold Medalist rated Australian Value Trust. Like other offerings from Dimensional, the Australian Value Trust employs factor tilts grounded in the research carried out by Eugene Fama and Kenneth French. From a starting point of the ASX’s cheapest 45% of stocks by book value, further value, size, and profitability factors are applied.

Woodside is Australia’s premier oil and gas player, with operations encompassing liquid natural gas, natural gas, condensate and crude oil. Morningstar Equity Analyst Mark Taylor sees Woodside’s low-cost LNG interests as attractive and feels the company also benefits from its unparalleled experience of LNG in the Australian market and long-held off-take agreements with several Asian utilities. However, the firm does not appear to have an economic moat.

Woodside’s share price has struggled since September 2023. The company also reported a 7% decline in first-quarter 2024 production but maintained its 2024 guidance for production and capital expenditure. Mark Taylor’s fair value estimate of $45.00 assumes relatively flat earnings before interest, taxes, depreciation and amortisation (E“BITDA”;) over the next decade as lower commodity prices offset production growth. At a share price of around $27.28, Woodside is trading 40% below this level.

[blueliner] 10/5/2024 09:13

About time too Kiwi, beginning to think I had been sold a pup by BHP.

[kiwi2007] 09/5/2024 22:57

Good news for ordinary shareholders at last:

[kiwi2007] 01/5/2024 12:04

ESG shareholders saving the world. And loosing their,and your, money :o(

[kiwi2007] 22/4/2024 23:30

Wokes on the attack and perhaps selling a few?



On the other hand MorningStar say:
Valuation: A$45.00 (A$28.63 atm)
BUY
Last updated:19/04/24

Woodside: Guidance for 2024 Is Maintained and Development Projects Progress

[garycook] 26/3/2024 07:29

WOODSIDE COMPLETES SALE OF 10% SCARBOROUGH INTEREST



Woodside has completed the sale of a 10% non-operating participating interest in the Scarborough Joint Venture to LJ Scarborough Pty Ltd (LNG Japan).[1]



The completion follows Woodside's announcement on 8 August 2023 that it had established a strategic relationship with LNG Japan that involved three elements: equity in the Scarborough Joint Venture; potential LNG offtake; and collaboration on potential opportunities in new energy. The sale proceeds received by Woodside of US$910 million for equity in the Scarborough Joint Venture comprises the purchase price, reimbursed expenditure and escalation.[2]



Woodside CEO Meg O'Neill welcomed completion of the sale.



"LNG Japan's commitment to the Scarborough Joint Venture is a demonstration of the value our customers place on gas as a long-term source of energy as they navigate the energy transition. Completion of the sale to LNG Japan is a significant milestone as we progress toward first LNG cargo from Scarborough targeted in 2026.



"We are also pleased to welcome Japan Organization for Metals and Energy Security's equity investment in LJ Scarborough Pty Ltd. JOGMEC's support reflects the contribution Scarborough gas will make to Japan's energy security."



Woodside holds a 90% interest in the Scarborough Joint Venture and will remain as operator. Following completion of the transaction with JERA announced on 23 February 2024, Woodside's interest will be 74.9% in the Scarborough Joint Venture.[3]



As a result of completion of the sale, applying estimates effective as at 26 March 2024, Woodside's Scarborough field proved (1P) undeveloped reserves reduced by 128.7 MMboe to 1,158.3 MMboe (Woodside share).[4] Proved plus probable (2P) undeveloped reserves reduced by 201.1 MMboe to 1,809.7 MMboe (Woodside share).[5] Woodside's Scarborough field Best Estimate (2C) contingent resources reduced by 2.2 MMboe to 20.2 MMboe (Woodside share).[6],[7]



The attached notes on petroleum reserves and resource estimates form part of this announcement.

[kiwi2007] 06/3/2024 19:27

Weakening oil and gas prices hit Woodside's profits, but it still turned around an 80% pay out ratio for dividends......

....Would you Buy, Hold or Sell the stock on the back of this result?
Rating: HOLD

The dividend yield is supporting the share price where it is.......

[loganair] 02/3/2024 09:08

Simply there is a glut of oil and gas in the world at the moment, especially as the United States are now producing 20mln barrels of oil a day, up from circa 13mln just a couple of years ago.

This glut is likely to continue for at least the next 2 years, especially as world economic growth has dramatically slowed down with Japan, Germany and the UK are all now in recession.

[kiwi2007] 02/3/2024 02:12

I'm afraid forecast yield is 5.3% for 2024 falling back to 4.7% in 2025.

"....Woodside provided preliminary 2024 guidance, including production of 185-195mmboe and capital expenditure of USD 5.0 billion-USD 5.5 billion. We sit at a high end 194 mmboe for the former and the midpoint for the latter. The production target is slightly lower than our prior estimate, and in conjunction with significantly weakened Brent crude futures since our last note, our respective 2024 EPS and DPS forecasts both decline 26% to AUD 1.62 and AUD 1.29.

[garycook] 29/2/2024 00:40

anhar, Still yielding 7%.So not to be sniffed at. Just needs the share price to recover to around £20 level.

[anhar] 28/2/2024 10:36

Final 2023 divi US 60¢, xd 07 March pd 04 April (2022 144¢)

2023 total 140¢ (2022 253¢)

So a cut of 44.7% on the back of net profits down 74%.

As purely an income investor this is disappointing but I'll continue to hold as my strategy is to retain very long term unless a share goes seriously wrong. Like most here I expect, I acquired my WDS shares from the BHP demerger.

[loganair] 08/2/2024 20:55

Australia’s Woodside Energy has ended talks with smaller rival Santos to form a $52 billion global LNG giant, with the bigger company saying it will only pursue a deal that clearly benefits its shareholders, as Scott Murdoch and Lewis Jackson report here.

The talks, first revealed in December, faltered as the two companies couldn’t agree on a valuation, according to two sources with direct knowledge of the matter. Woodside had faced pressure from some of its shareholders not to pay a premium for Santos amid concern that the deal didn’t offer enough synergies to make economic sense.

[kiwi2007] 07/2/2024 20:36

And the Santos deal thankfully called off:

“Woodside has ceased discussions regarding a potential merger with Santos,” Woodside said in a statement to the ASX.
“For every opportunity Woodside assesses, it conducts thorough due diligence, and will only pursue a transaction that is value accretive for its shareholders,” the company added, giving no further details about the decision."

[gateside] 16/1/2024 07:39

Header updated with 2024 result dates

[kiwi2007] 15/12/2023 19:03

No advantage at all to Woodside shareholders in a merger which doesn't appear to have ANY synergies just for the sake of scale.

Woodside's a great business on its own. Santos's assets are inferior - this potential deal makes no sense.

[garycook] 07/12/2023 07:51

Thursday, 7 December 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
RESPONSE TO MEDIA SPECULATION
In response to recent media speculation, Woodside confirms it is in discussions regarding a potential
merger with Santos Ltd.
Discussions remain confidential and incomplete, and there is no certainty that the discussions will
lead to a transaction.
As a global energy company, Woodside continuously assesses a range of opportunities to create and
deliver value for shareholders.
Woodside will continue to update the market in accordance with its continuous disclosure obligations.

[garycook] 16/11/2023 13:58

Me also. Hold BP,DEC,SHEL,and WDS.

[anhar] 16/11/2023 12:44

That's interesting Gary, that they took the trouble to give such a detailed response.

I continue to hold my WDS allocation that I received from the BHP distribution. It does make me a little overweight in oil and gas as I also hold BP. and SHEL which have been in my income port for many years. Despite that I have no intention at present of selling any of my WDS shares.

[garycook] 16/11/2023 00:47

Investor Relations

From:
[e-mail]



Wed, 15 Nov at 11:30

Hi Gary,



Thanks for your email. On slide 25 (Investor Briefing Day 2023 presentation), pricing between this year and last year’s free cash flow has changed. Last year, one scenario was shown which was based on the Brent oil forward price curve (as at 16 November 2022) of $89/bbl in 2023, $82/bbl in 2024, $77/bbl in 2025, $75/bbl in 2026 followed by a long term $70/bbl (real terms 2022) from 2027. On slide 25 of this year’s presentation, three price scenarios (US$50, $70 and $90) were shown. The $70 scenario, from 2024 was based on a US$70/bbl Brent long-term oil price (2022 real terms) with a long term inflation rate of 2.0%.



In addition to the pricing changes, the free cash flow in this year’s Investor Briefing Day presentation included Trion capital expenditure, following the final investment decision in June 2023 and the update to cost and schedule for Sangomar which was announced in July.



In relation to slide 26, Woodside’s dividend policy is to pay a minimum of 50% of net profit after tax (NPAT) excluding non-recurring items, with a target payout ratio of between 50% and 80%. The intent of slide 26 is to demonstrate Woodside’s cash generation at a US$50 and US$70 scenario and highlight that in the light blue shading area, there is capacity available for additional investment, financing or returns to shareholders.



Kind regards

Investor Relations



Woodside Energy

Mia Yellagonga

Karlak, 11 Mount Street

Perth WA 6000

Australia

E:

[e-mail]

www.woodside.com

[garycook] 13/11/2023 11:29

Kiwi2007. I have sent your Post on a possible 3% dividend to WDS HR.If I get a reply I will post it.

[kiwi2007] 13/11/2023 09:22

Worth looking at the analysts questions on the investor briefing:

"When we look at the free cash flow profile on
slide 25 relative to what was presented 12 months ago, 12 months ago you were forecasting US$4 billion of
free cash flow in 2024, and it now looks more like break even and when we look at that terminal free cash
flow level, now at around US$5 billion per annum out in 2027-28 versus more like US$7 billion 12 months
ago, it looks like that free cash flow profile has stepped down materially. On my numbers, it's around $7
billion lower free cash flow over the next four years. " ?????

and

"Just a quick
question if I can on slide 26, the sources and uses of cash. We can squabble about over the shading, but to
make the maths easy, let’s say that underlying dividend at 80% payout ratio there’s about, it looks like,
US$6.5 billion over that five-year period. That equals US$1.3 billion a year. That’s a 3% dividend yield. I
guess when we compare that to the slide you put on page 76 looking back at the prospective 12-month
dividend, you’re up near the top, but 73% is down near the bottom. As a Board, do you think that at $70 oil
paying a 3% dividend is competitive enough"


hxxps://www.woodside.com/docs/default-source/asx-announcements/2023-asx/investor-briefing-day-2023-transcript.pdf?sfvrsn=e6487897_3

Doesn't fill me with enthusiasm.