Woodside upbeat after record year of production

Woodside Energy reported record full-year production on Wednesday, of 187.2 million barrels of oil equivalent, exceeding the top end of its production guidance range of 183 million to 188 million barrels.

The company said that for the fourth quarter, production reached 48.1 million equivalent barrels, maintaining a reliability rate of 99.9%, with particular success on the Pluto project, achieving 98.2% for 2023.

Quarterly revenue also saw a 3% increase from the prior quarter, reaching $3.36bn, primarily due to higher realised prices, although that was partially offset by lower traded LNG volumes and timing of oil and condensate sales.

The portfolio's average realised price stood at $66.80 per barrel of oil equivalent, with 31% of produced LNG sold at prices linked to gas hub indices.

Woodside said it made significant progress on its major projects during the fourth quarter, with the Scarborough Energy Project obtaining secondary environmental approvals for Commonwealth waters in December and initiating offshore activities, marking a 55% completion milestone.

Since the quarter ended, the project spudded its first production well and completed around 57 kilometres of the 433-kilometre pipelay.

Meanwhile, the Sangomar Project's floating production storage and offloading (FPSO) facility departed Singapore in December, with the project being 94% complete at the end of the period, featuring 17 out of 23 wells drilled and completed.

Additionally, the Trion Project continued awarding contracts and initiated procurement activities for floating production unit (FPU) materials and subsea equipment.

In the realm of carbon and new energy initiatives, Woodside said its proposed Woodside Solar Project received planning approvals as well as state and federal environmental approvals.

The Angel carbon capture and storage (CCS) opportunity started pre-front end engineering and design (FEED) studies, indicating progress in environmental sustainability efforts.

Woodside is said it was also closely evaluating the implications of the proposed US Federal Government tax incentive criteria for the H2OK Project.

“Our expanded global portfolio delivered record production in 2023,” said chief executive officer Meg O'Neill.

“Fourth quarter production reflected the completion of planned turnaround and maintenance activities at the North West Shelf and Shenzi.

Pluto LNG also maintained its strong production performance, again achieving 99.9% reliability during the period.”

O'Neill added that in December, Woodside confirmed that it was in discussions regarding a potential merger with Santos.

“The talks are still at an early stage and there is no certainty that the transaction will progress.

“Woodside will be disciplined, conduct thorough due diligence, and will only pursue a transaction that is value-accretive for shareholders.

“As we complete our first full reporting year after the merger with BHP Petroleum, we are pleased with the results of our strong combined portfolio.”

At 0929 GMT, shares in Woodside Petroleum were down 0.5% at 1,601p.

Reporting by Josh White for Sharecast.com.