Woodside Energy Group Ltd Q2 FY2023 earnings call

• Celebrated 1 year since merging with BHP Petroleum, achieving a record net profit after tax of $1.7 billion.
• Executed major turnarounds safely, with continued reliable operations at LNG facilities.
• Invested in the business with major projects like Sangomar in Senegal (88% complete) and Trion in Mexico (final investment decision in June).
• Sold 10% of Scarborough to LNG Japan, reducing capital commitment and bringing in a strategic partner.
• Focused on sustainability, on track for 2025 emissions reduction targets, and paid a record AUD 3.7 billion in Australian tax and royalty.
• Addressed safety concerns after a worker death at North Rankin, implementing changes and committing to improving safety performance.

Woodside produced 91.3 million barrels of oil equivalent in the first half of 2023. Operating revenue reached $7.4 billion, with a record first half EBITDA of $4.9 billion. The average portfolio price was $74 per barrel of oil equivalent. The company declared an interim dividend of USD 0.80 per share, fully franked for eligible Australian shareholders. Revenue contribution was driven by strong operations, including reliable LNG facilities with 97.7% reliability, and the sale of a 10% interest in Scarborough to manage capital commitments.

• Increased gas hub exposure guidance for the year to 27% to 33%.
• Declared an interim dividend of USD 0.80 per share, representing 80% of underlying profits and an annualized yield of 6.9%.
• Continues to invest in major projects such as Sangomar, Scarborough, and Trion, with the Trion project having started key contract executions.

• Delays in secondary environmental approvals for Scarborough, which is a key risk as receiving these approvals is critical to the project schedule.
• Potential legal challenges related to environmental approvals for Scarborough, which could impact the project timeline.
• Industrial action risk affecting North West Shelf offshore platform workers, which could disrupt feedstock supply to LNG facilities.
• Cost inflation and escalation for contractors on projects like Scarborough, which could impact project budgets and timelines.

Q: James Byrne asked about the cash taxes miss and Scarborough schedule.

A: Graham Tiver noted cash taxes were higher due to higher profits in 2022 and 2023, while Marguerite O’Neill discussed Scarborough's schedule, noting the floating production unit is critical and there is some flexibility in other elements but approvals are a key risk.

Q: Tom Allen inquired about Scarborough LNG marketing.

A: Marguerite O’Neill stated they are in discussions with multiple counterparties for LNG offtake, with the MoU with LNG Japan being positive, and discussions with quality counterparties well-advanced.

Q: Saul Kavonic asked about industrial action risk.

A: Marguerite O’Neill explained that workers on North West Shelf offshore platforms are negotiating, and while their actions could impact feedstock supply, they are engaged in constructive bargaining.

Q: Adam Martin asked about further sell-downs at Scarborough.

A: Marguerite O’Neill stated they are comfortable with 90% ownership in Scarborough, having found a good partner in LNG Japan, and are open to further discussions if prospective buyers have interest.

Q: Henry Meyer asked about Sangomar delay and Calypso development.

A: Marguerite O’Neill discussed Sangomar's delay due to material quality issues in China, with lessons learned for Scarborough, and Calypso's development, noting commercial options are being explored with various downstream customers.