Woodside Energy (WDS) - 2022 Q4 - Annual Report

Overview About Woodside Woodside is a global energy company, strengthened by its 2022 merger with BHP's petroleum business, which expanded its portfolio across Australia, the Gulf of Mexico, the Caribbean, and Senegal, focusing on low-cost, lower-carbon energy production with major projects like Scarborough and Sangomar in execution, and targeting a $5 billion investment in new energy products and lower carbon services by 2030, aiming to reduce net equity Scope 1 and 2 emissions by 30% by 2030 towards a net-zero aspiration by 2050 - The merger with BHP's petroleum business significantly increased Woodside's global portfolio scale and diversification, including assets in Australia, the Gulf of Mexico, the Caribbean, Senegal, and Timor-Leste[14] - Key projects in execution include Scarborough and Pluto Train 2 in Australia (targeting first LNG in 2026), Sangomar in Senegal (targeting first oil in late 2023), and Shenzi North and Mad Dog Phase 2 in the US Gulf of Mexico[15] - Woodside aims to reduce net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025 and 30% by 2030, aspiring to net zero by 2050, and targets a $5 billion investment in new energy products and lower carbon services by 2030[17] 2022 Achievements In 2022, Woodside achieved record financial and operational results, highlighted by a 228% increase in Net Profit After Tax to $6.5 billion and a 142% rise in operating revenue to $16.8 billion, with production volume seeing a significant 73% increase to 157.7 MMboe, and the full-year dividend growing by 87% to 253 US cents per share, alongside key strategic milestones including the successful merger with BHP's petroleum business and continued execution of major projects like Scarborough and Sangomar 2022 Key Performance Indicators | Metric | 2022 Value | Change vs. 2021 | | :--- | :--- | :--- | | Net Profit After Tax | $6.5 billion | ↑ 228% | | Operating Revenue | $16.8 billion | ↑ 142% | | Underlying Net Profit After Tax | $5.2 billion | ↑ 223% | | Full-Year Dividend | 253 US cps | ↑ 87% | | Production Volume | 157.7 MMboe | ↑ 73% | | Free Cash Flow | $6.5 billion | ↑ 669% | - Significant corporate and project milestones in 2022 included the merger with BHP's petroleum business, continued execution of Scarborough and Sangomar Field Development Phase 1, completion of Pluto Train 2 sell-down, and awarding contracts for H2OK alkaline electrolyser equipment and liquefaction units[23] 2022 Summary The company completed its transformational merger with BHP's petroleum business in 2022, achieving record profit and production, with reported Net Profit After Tax reaching $6.5 billion and the full-year dividend increasing by 87% to 253 US cents per share, while significantly strengthening its balance sheet with net debt at $583 million and gearing at 1.6% Key Financial and Operational Metrics (2022 vs 2021) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Reported NPAT | $6,498 million | $1,983 million | ↑ 228% | | Earnings Per Share (EPS) | 430 US cps | 206 US cps | ↑ 109% | | Full-Year Dividend | 253 US cps | 135 US cps | ↑ 87% | | Operating Revenue | $16,817 million | $6,962 million | ↑ 142% | | Production | 157.7 MMboe | 91.1 MMboe | ↑ 73% | | Net Debt | $583 million | $3,772 million | ↓ 85% | | Gearing | 1.6% | 21.9% | ↓ 20.3 p.p. | - The company's balance sheet was significantly strengthened, with net debt reduced to $583 million and gearing at 1.6%, well below the target range of 10-20%, and liquidity stood at over $10 billion at year-end[29][34] - Operational performance remained strong with high LNG reliability, however, the Total Recordable Injury Rate (TRIR) increased to 1.80 per million work hours[30][33] Chair's Report The Chair highlighted 2022 as a historic year for Woodside, marked by the successful merger with BHP's petroleum business, which created the largest energy company on the ASX and, combined with high energy prices and strong operations, resulted in a record net profit of $6.5 billion, leading to a total full-year dividend of 253 US cents per share, while emphasizing the company's strategy to provide reliable, affordable, and lower-carbon energy amidst global market turmoil and the energy transition, though personal safety outcomes require improvement - The merger with BHP's petroleum business was a momentous event, creating the largest energy company listed on the ASX and leading to secondary listings on the London and New York Stock Exchanges[40][52] 2022 Financial Highlights from Chair's Report | Metric | Value | | :--- | :--- | | Reported NPAT | $6,498 million | | Final Dividend | 144 US cents per share (fully-franked) | | Total Full-Year Dividend | 253 US cents per share | - Key growth projects are progressing well, with Scarborough on track for the first LNG cargo in 2026 and Sangomar expected to deliver first oil in late 2023, and the company is also advancing new energy opportunities, targeting its first final investment decision at the H2OK hydrogen project in 2023[46][50] - Personal safety outcomes in 2022 did not improve and are a key area for improvement in 2023[45] Chief Executive Officer's Report The CEO described 2022 as a transformative year, delivering a record net profit of $6.5 billion and operating cash flow of $8.8 billion, driven by the BHP petroleum merger and strong market conditions, which enhanced Woodside's scale, diversity, and resilience, with initiatives on track to deliver over US$400 million in annual synergies, while also highlighting strong operational performance, significant progress on major growth projects, and an 11% reduction in net equity Scope 1 and 2 emissions 2022 Financial Performance from CEO's Report | Metric | Value | | :--- | :--- | | Net Profit After Tax (NPAT) | $6,498 million | | Operating Cash Flow | $8,811 million (↑ 132%) | - The merger with BHP's petroleum business is on track to deliver greater than US$400 million in annual synergies ahead of target[56] - Major projects are advancing as planned: Scarborough and Pluto Train 2 were 25% complete at year-end, targeting first LNG in 2026, and the Sangomar development is targeting first oil towards the end of 2023[61][62] - Woodside achieved an 11% reduction in net equity Scope 1 and 2 emissions against its 2016-2020 baseline and is maturing new energy opportunities, aiming for a final investment decision on the H2OK hydrogen project in 2023[68] Focus Areas Woodside's global portfolio is geographically diverse, with key producing assets, projects, and development opportunities spanning Australia, the Americas, and Africa, and in 2022, its production was primarily driven by LNG, accounting for 54% of the annual total 2022 Annual Production by Product | Product | Share of Production | | :--- | :--- | | LNG | 54% | | Pipeline Gas | 18% | | Oil | 29% | | NGL | 4% | - The company's operations and growth pipeline are spread across key global energy hubs, including established production in Australia and the Gulf of Mexico, major projects in Senegal, and new energy opportunities in the US and Australia[73][75] Merger with BHP Petroleum The merger between Woodside and BHP's petroleum business, completed on June 1, 2022, created the largest energy company listed on the ASX, leading to new secondary listings on the NYSE and LSE, with Woodside issuing 914.8 million new shares to BHP and receiving approximately $1.1 billion in net cash, and is expected to deliver over US$400 million in annual synergies - The merger was completed on June 1, 2022, after receiving 98.7% approval from voting Woodside shareholders on May 19, 2022[38][79] - Woodside issued 914,768,948 new shares to BHP and received net cash of approximately $1.1 billion, and the company commenced trading on the NYSE and LSE under the ticker WDS in June 2022[79][80] - The company has implemented initiatives to deliver over US$400 million in annual pre-tax synergies ahead of the original target[80][82] - The strategic rationale for the merger focused on enhancing shareholder returns, portfolio quality, cash generation, development optionality, energy transition leadership, and achieving synergies[81] Financial Performance and Strategy Financial Overview In 2022, Woodside achieved a record reported net profit after tax (NPAT) of $6.5 billion and an underlying NPAT of $5.2 billion, primarily driven by the BHP petroleum merger, higher commodity prices, and strong operational performance, generating $8.8 billion in operating cash flow and $6.5 billion in free cash flow, enabling a fully franked final dividend of 144 US cents per share, while maintaining a strong balance sheet with over $10.2 billion in liquidity and gearing at a low 1.6% Key Financial Metrics (2020-2022) | Metric | Unit | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $ million | 16,817 | 6,962 | 3,600 | | EBITDA excluding impairment | $ million | 11,234 | 4,135 | 1,922 | | Net profit after tax (NPAT) | $ million | 6,498 | 1,983 | (4,028) | | Underlying NPAT | $ million | 5,230 | 1,620 | 447 | | Net cash from operating activities | $ million | 8,811 | 3,792 | 1,849 | | Free cash flow | $ million | 6,546 | 851 | (263) | | Total Production | MMboe | 157.7 | 91.1 | 100.3 | - The 2022 reported NPAT of $6.5 billion was a significant increase from $2.0 billion in 2021, primarily driven by higher prices ($4.83 billion impact) and higher sales volumes ($5.01 billion impact) from the BHP merger and Pluto-KGP Interconnector, partially offset by higher cost of sales (-$2.70 billion impact) and increased taxes (-$1.35 billion impact)[89] - A 2022 fully franked final dividend of 144 US cents per share was determined, valued at $2.73 billion, representing approximately 80% of underlying NPAT for the second half of 2022, and the dividend reinvestment plan (DRP) has been suspended[90] - Woodside ended 2022 with $10.24 billion in liquidity and gearing of 1.6%, below its target range of 10-20%, and has placed oil price hedges for approximately 22 MMboe of 2023 production at an average price of $75 per barrel[91][101][102] Strategy and Capital Management Woodside's strategy is to thrive through the energy transition by building a low-cost, lower-carbon, profitable, resilient, and diversified portfolio, supported by a disciplined capital allocation framework that sets specific investment criteria for oil, gas, and new energy projects to optimize value and shareholder returns, while targeting a dividend payout ratio of 50-80% of underlying NPAT and maintaining a target gearing range of 10-20% to support its investment grade credit rating - The company's core strategy is to build a low cost, lower carbon, profitable, resilient, and diversified portfolio to succeed through the energy transition[105] Capital Allocation Framework Opportunity Targets | Opportunity | Focus | IRR Target | Payback Target | | :--- | :--- | :--- | :--- | | Oil | Generate high returns to fund diversified growth | > 15% | Within 5 years | | Gas (LNG) | Long-term cash flow, leveraging infrastructure | > 12% | Within 7 years | | New Energy | Hydrogen, ammonia, CCUS to reduce customer emissions | > 10% | Within 10 years | - The capital management framework aims to optimize value and shareholder returns through several levers, including a dividend policy targeting a 50-80% payout ratio of underlying NPAT, a target gearing range of 10-20% to maintain an investment-grade credit rating, hedging to protect the balance sheet against commodity cycles, and active management of participating interests, such as the 2022 sell-down of a 49% interest in Pluto Train 2[121][123] Energy Markets Global energy markets in 2022 were characterized by surging prices and volatility, with Dated Brent oil averaging $101/bbl and North Asian LNG prices more than doubling to $34/MMBtu, driven by geopolitical tensions and an uncertain energy transition, while global LNG demand is expected to grow over 60% by 2040, necessitating new projects, and Australian supply challenges led to a 12-month price cap on the east coast - The Dated Brent oil price averaged $101/bbl in 2022, a 43% increase from 2021, influenced by post-COVID-19 demand rebound and sanctioned Russian supply[126] - Global gas markets remained tight, with North Asian LNG prices averaging $34/MMBtu in 2022, more than double the 2021 average, due to reduced Russian supplies to Europe[127] - Global LNG demand is projected to grow by over 60% between 2021 and 2040, necessitating new liquefaction capacity to meet supply needs from the late-2020s[128] - The Australian east coast gas market experienced a price spike in mid-2022, leading the government to impose a 12-month price cap of A$12 per gigajoule on new wholesale gas contracts for 2023[132] Business Model and Value Chain Woodside's business model spans the full energy value chain, from acquisition and exploration to decommissioning, with 2022 key activities including completing the BHP petroleum merger, advancing major projects, enhancing operational output, securing new long-term LNG sales agreements, and progressing decommissioning work - Acquire, explore and develop: Completed the merger with BHP's petroleum business and is targeting Final Investment Decision (FID) readiness for the Trion and H2OK projects in 2023[137] - Project execution: Continued execution of the Scarborough and Sangomar Field Development Phase 1 projects[137] - Operate: Increased production by accelerating Pluto gas through the Pluto-KGP Interconnector and achieved over 98% reliability at both Pluto LNG and Karratha Gas Plant (KGP)[137] - Market: Entered into a long-term sale and purchase agreement to supply LNG to Europe and an offtake agreement to access flexible LNG supply in the Atlantic basin[137] - Decommission: Completed permanent plug and abandonment (P&A) of four wells in the Balnaves field and continued the Enfield P&A campaign[137] Our Business Australian Operations Woodside's Australian operations, including major assets like Pluto LNG, NWS Project, Wheatstone, and Bass Strait, saw production increase by 50% to 136.6 MMboe in 2022, driven by the BHP merger doubling Woodside's NWS interest and key operational achievements such as the Pluto-KGP Interconnector start-up, which enabled processing of Pluto gas at Karratha Gas Plant and produced 13 additional LNG cargoes - Woodside's share of production from Australian operations was 136.6 MMboe in 2022, a 50% increase from 2021, largely due to the merger with BHP's petroleum business[138] - Pluto LNG production increased by 18% to 52.4 MMboe, driven by high reliability (98.3%) and the start-up of the Pluto-KGP Interconnector, which processed Pluto gas at KGP, resulting in 13 additional LNG cargoes in 2022[139] - The North West Shelf (NWS) Project production for Woodside increased by 49% to 36.7 MMboe, following the doubling of its equity share to 33.33% post-merger, and the project also commenced tolling third-party gas from Pluto[143][145] - The Bass Strait assets, acquired in the merger, contributed 19.6 MMboe of production in 2022 and remain a key source of gas for Australia's east coast market[152] International Operations Woodside's international portfolio, primarily in the US Gulf of Mexico and the Caribbean, focuses on safe, low-cost, and reliable operations, with key assets like Shenzi, Atlantis, Mad Dog, and Greater Angostura contributing significantly to post-merger production, and ongoing growth projects such as Shenzi North targeting first oil in 2024 and Mad Dog Phase 2 expected to start up in 2023 International Asset Production (from June 1, 2022) | Asset | Woodside's Share of Production (MMboe) | | :--- | :--- | | Shenzi | 6.2 | | Atlantis | 6.3 | | Mad Dog | 2.6 | | Greater Angostura | 5.8 | - The Shenzi North project, a two-well subsea tieback to the Shenzi platform, is targeting first oil in 2024[164] - The Mad Dog Phase 2 development, which includes the new 'Argos' floating production facility, is expected to start up in 2023[167] Marketing and Trading Following the BHP merger, Woodside expanded its global marketing and trading portfolio, with 23% of produced LNG exposed to gas hub indices in 2022, securing long-term LNG supply agreements with Uniper for Europe and Commonwealth LNG for its Atlantic position, and supplying approximately 15% of gas to the Australian east coast market from June to December 2022 - In 2022, Woodside's exposure of produced LNG to gas hub indices was 23%[173] - From June to December 2022, Woodside supplied approximately 15% of all gas to the Australian east coast market from its Bass Strait asset[175] - Key commercial agreements in 2022 include a long-term sale and purchase agreement (SPA) with Uniper to supply LNG to Europe and an offtake agreement with Commonwealth LNG to bolster its Atlantic position[176] - Woodside chartered an additional five new-build LNG ships in 2022 to support Scarborough LNG delivery and growth in trading activities, with deliveries expected between 2024 and 2027[176] Projects Woodside is advancing several major international projects, including Scarborough in Australia targeting first LNG in 2026 with FPU and pipeline fabrication underway, Sangomar Field Development in Senegal targeting first oil in late 2023 with FPSO construction complete and subsea installation underway, and the Trion oil project in Mexico which completed FEED and targets final investment decision (FID) readiness in 2023 - Scarborough: The project is targeting first LNG cargo in 2026, with key 2022 milestones including the start of FPU topsides and hull fabrication, delivery of subsea trees, and commencement of pipeline manufacturing[181][185] - Sangomar: Phase 1 is targeting first oil in late 2023, with the FPSO construction phase complete, the subsea installation campaign commenced in September 2022, and seven of the 23 development wells complete by year-end[187][190][192] - Trion: This deepwater oil development in Mexico is targeting FID readiness in 2023, with FEED activities completed in 2022 and key tender packages issued for competitive bids[194][196][197] Exploration and Development Woodside is maturing a portfolio of development opportunities, including Calypso, Browse (now with CCS), and Sunrise, while its 2022 exploration program included activities in the US Gulf of Mexico, Senegal, and the Caribbean, establishing new acreage in Egypt and Congo, and exiting positions in offshore Canada and the Republic of Korea as part of post-merger portfolio optimization - The Browse development concept has been updated to include a carbon capture and storage (CCS) solution to abate reservoir CO2[202] - The Sunrise Joint Venture is undertaking concept select studies while awaiting a new production sharing contract between the governments of Timor-Leste and Australia[204] - Woodside expanded its exploration portfolio by establishing new acreage positions in Egypt and Congo[210] - Following the merger, Woodside exited its exploration positions in offshore Canada and the Republic of Korea[211] New Energy and Carbon Solutions Woodside is pursuing its new energy strategy with a target to invest $5 billion by 2030, with a portfolio including proposed hydrogen and ammonia projects like the advanced H2OK in Oklahoma, and is also developing carbon solutions by securing greenhouse gas assessment permits for future CCS in Australia and forming collaborations for carbon-to-products technologies - Woodside has a target to invest $5 billion in new energy products and lower carbon services by 2030[214] - The H2OK liquid hydrogen project in Oklahoma completed FEED activities in 2022 and contracts were awarded for electrolyser and liquefaction units[215] - In 2022, Woodside was awarded three greenhouse gas assessment permits for potential carbon capture and storage (CCS) projects in the Browse, Northern Carnarvon, and Bonaparte Basins in Australia[227] - The company launched carbon capture and utilisation (CCU) collaborations with ReCarbon and LanzaTech to assess converting greenhouse gases into ethanol, and invested in String Bio for recycling greenhouse gases into products like livestock feed[229][231] Climate and Sustainability Woodside's climate strategy focuses on reducing its net equity Scope 1 and 2 emissions by 15% by 2025 and 30% by 2030 towards a net-zero aspiration by 2050, achieving an 11% reduction in 2022 by retiring 754 kt CO2-e of carbon credits, and targets a $5 billion investment in new energy products and lower carbon services by 2030 as part of its Scope 3 emissions plan - Woodside has set targets to reduce net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025 and 30% by 2030, aspiring to achieve net zero by 2050 or sooner[237] - In 2022, the company's net equity Scope 1 and 2 emissions were 11% below the 2016-2020 starting base, achieved by retiring 754 kt CO2-e of carbon credits[237] - As part of its Scope 3 emissions plan, Woodside targets a $5 billion investment in new energy products and lower carbon services by 2030, with over $100 million spent by the end of 2022 towards this target[240] - In 2022, Woodside became the first Australasian company to sign the 'Aiming for Zero Methane Emissions Initiative'[239][240] Risk Factors Woodside identifies and manages a range of strategic, entity, and emerging risks inherent to its business, with key categories including climate change, social license to operate, growth, operations, finance and market volatility, people and culture, and digital and cybersecurity threats - The company categorizes risks into three types: Strategic, Entity, and Emerging risks, managed through a comprehensive framework overseen by the Board's Audit & Risk Committee[248][249][250] - Climate Change Risk: Includes transition risks (demand/pricing for oil & gas, policy changes) and physical risks (damage to assets from severe weather)[253][254] - Growth Risk: Pertains to the delivery of complex, multi-year projects, competition for resources, and uncertainties in commercializing new energy technologies like hydrogen[265][266][268] - Finance and Market Risk: Encompasses volatility in commodity prices, interest rates, and foreign exchange, as well as risks associated with the ongoing integration of BHP's petroleum business[289][290] Reserves and Resources Statement As of December 31, 2022, Woodside's remaining Proved (1P) Reserves stood at 2,385.2 MMboe and Proved plus Probable (2P) Reserves at 3,640.3 MMboe, with the acquisition of BHP's petroleum assets significantly boosting reserves by adding a net 922.8 MMboe of 1P and 1,472.3 MMboe of 2P Reserves, and the company now reports its Proved (1P) Reserves in accordance with SEC regulations Woodside's Reserves and Contingent Resources Overview (as at 31 Dec 2022) | Category | Natural gas (Bcf) | NGLs (MMbbl) | Oil & condensate (MMbbl) | Total (MMboe) | | :--- | :--- | :--- | :--- | :--- | | Proved (1P) | 10,783.6 | 26.3 | 467.0 | 2,385.2 | | Proved plus Probable (2P) | 16,425.9 | 48.0 | 710.6 | 3,640.3 | | Contingent Resources (2C) | 41,589.1 | 88.8 | 1,276.7 | 8,661.9 | - Total production for 2022 was 171.7 MMboe, which includes 156.8 MMboe for sale and 14.9 MMboe consumed as fuel in operations[311] - The acquisition of BHP's petroleum assets resulted in net increases of 922.8 MMboe for 1P Reserves, 1,472.3 MMboe for 2P Reserves, and 1,816.3 MMboe for 2C Contingent Resources[312] - Proved Undeveloped (PUD) Reserves were 1,615.2 MMboe, approximately 68% of total Proved Reserves, and during FY2022, 54.0 MMboe of PUD Reserves were converted to Proved Developed Reserves through development activities[331][332] Governance Corporate Governance Statement Woodside is committed to high standards of corporate governance, overseen by its Board comprising ten independent non-executive directors and the CEO, supported by four standing committees, with key 2022 activities including completing the BHP merger, monitoring major projects, and setting emissions reduction targets, while confirming compliance with ASX, LSE, and NYSE requirements - The Board is composed of ten independent non-executive directors and the CEO, Meg O'Neill[368] - Key Board activities during 2022 included completing the merger with BHP's petroleum business, monitoring the Scarborough, Pluto Expansion, and Sangomar projects, appointing a new CFO, and setting near and medium-term emissions reduction targets[369][370] - The Board has four standing committees: Audit & Risk, Human Resources & Compensation, Sustainability, and Nominations & Governance[437] - As of December 31, 2022, the Board had 36% female representation, and the company has a public commitment to improve Board diversity, targeting 40% male, 40% female, and 20% any gender[499] Directors' Report This report covers the financial year ending December 31, 2022, confirming Woodside's principal activity as hydrocarbon exploration, development, production, and marketing, with consolidated operating profit attributable to shareholders reaching $6.5 billion, a significant increase from 2021, and directors resolving to pay a final, fully franked dividend of 144 US cents per share, while noting compliance with environmental legislation despite three minor incidents - The consolidated operating profit after tax attributable to shareholders for 2022 was $6,498 million, compared to $1,983 million in 2021[519] Dividend Summary | Dividend | Cents per share | Franking | Payment Date | | :--- | :--- | :--- | :--- | | 2022 Final | 144 | Fully | 5 April 2023 | | 2022 Interim | 109 | Fully | 6 October 2022 | - In 2022, there were three environmental incidents involving spills greater than 1 barrel, none of which resulted in significant negative environmental impacts[525] Remuneration Report The 2022 Remuneration Report details compensation for Key Management Personnel (KMP) during a transformative year marked by the BHP merger, with the remuneration framework reviewed for global competitiveness, the 2022 Corporate Scorecard outcome adjusted to 8 out of 10 to recognize significant achievements, and post-merger, the CEO's FAR increased to A$2.4 million and the cash component of the Executive Incentive Scheme (EIS) award for KMP increased to 20% Five-Year Performance Summary | Metric (US$ million, unless stated) | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA excluding impairment | 11,234 | 4,135 | 1,922 | 3,531 | 3,814 | | Net profit after tax (NPAT) | 6,498 | 1,983 | (4,028) | 343 | 1,364 | | Dividends per share (US cents) | 253 | 135 | 38 | 91 | 144 | | Share closing price (A$) | 35.44 | 21.93 | 22.74 | 34.38 | 31.32 | | Production (MMboe) | 157.7 | 91.1 | 100.3 | 89.6 | 91.4 | - The 2022 Corporate Scorecard outcome was 7 out of 10, which the Board exercised its discretion to raise to 8 for the purposes of the Executive Incentive Scheme (EIS) to recognize the successful merger and strong operational results[557][614] - Effective June 1, 2022, CEO Meg O'Neill's Fixed Annual Remuneration (FAR) increased to A$2,400,000, and her target Variable Annual Reward (VAR) was set at A$6,720,000[563] - The cash component of the EIS award for Executive KMP will increase from 12.5% to 20% to better align with market peers, while 80% remains as deferred equity[564][588] Financial Statements Financial Statements For the year ended December 31, 2022, Woodside reported a significant increase in financial performance, with operating revenue reaching $16.82 billion and profit after tax attributable to equity holders of $6.50 billion, driven by the BHP petroleum merger and higher commodity prices, which strengthened the balance sheet with total assets growing to $59.32 billion and net assets increasing to $37.13 billion, while generating $8.81 billion in net cash from operating activities Consolidated Income Statement Summary (Year ended Dec 31) | Metric (US$ million) | 2022 | 2021 | | :--- | :--- | :--- | | Operating revenue | 16,817 | 6,962 | | Gross profit | 10,277 | 3,117 | | Profit before tax | 9,174 | 3,290 | | Profit after tax | 6,575 | 2,036 | | Profit attributable to equity holders | 6,498 | 1,983 | Consolidated Statement of Financial Position Summary (As at Dec 31) | Metric (US$ million) | 2022 | 2021 | | :--- | :--- | :--- | | Total current assets | 9,290 | 4,278 | | Total non-current assets | 50,031 | 22,196 | | Total assets | 59,321 | 26,474 | | Total liabilities | 22,194 | 12,245 | | Net assets | 37,127 | 14,229 | Consolidated Statement of Cash Flows Summary (Year ended Dec 31) | Metric (US$ million) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | 8,811 | 3,792 | | Net cash used in investing activities | (2,265) | (2,941) | | Net cash used in financing activities | (3,364) | (1,424) | | Net increase/(decrease) in cash held | 3,182 | (573) | Additional Information Supplementary Information on Oil and Gas (Unaudited) This section provides unaudited supplementary information on oil and gas activities as required by FASB and SEC regulations, including details on capitalised costs totaling $67.7 billion before depreciation in 2022, and a standardised measure of discounted future net cash flows from proved reserves estimated at $54.1 billion at year-end 2022, a significant increase primarily due to acquisitions and higher prices Net Capitalised Costs Relating to Oil and Gas Production Activities (US$m) | Year | Australia | International | Total | | :--- | :--- | :--- | :--- | | 2022 | 25,991 | 14,889 | 40,880 | | 2021 | 16,786 | 2,262 | 19,048 | | 2020 | 16,296 | 1,016 | 17,312 | Standardised Measure of Discounted Future Net Cash Flows (US$m) | Year | Australia | International | Total | | :--- | :--- | :--- | :--- | | 2022 | 42,672 | 11,471 | 54,143 | | 2021 | 14,654 | 1,083 | 15,737 | | 2020 | 5,084 | - | 5,084 | Three-Year Financial Analysis Woodside's financial performance over the past three years reflects significant market volatility and the transformative impact of the 2022 BHP merger, with operating revenue surging to $16.8 billion in 2022 from $3.6 billion in 2020, and attributable NPAT recovering from a $4.0 billion loss in 2020 to a $6.5 billion profit in 2022, driven by higher commodity prices and increased production volumes, with analysis broken down by product and new operating segments Three-Year Financial Results Summary (US$m) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Operating revenue | 16,817 | 6,962 | 3,600 | | Gross profit | 10,277 | 3,117 | 615 | | Profit/(loss) after tax | 6,575 | 2,036 | (3,975) | Three-Year Production and Sales Volumes (MMboe) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total production | 157.7 | 91.1 | 100.3 | | Total sales volumes | 168.9 | 111.6 | 106.8 | - The Australia segment's profit before tax and net finance costs increased by 154% to $9.4 billion in 2022, driven by higher volumes from the merger and the Pluto-KGP interconnector, higher prices, and the gain on the Pluto Train 2 sell-down[1205][1206] - The International segment, newly significant after the merger, reported operating revenue of $1.6 billion and a profit before tax and net finance costs of $125 million in 2022[1211][1212][1213] Additional Disclosures This section provides supplementary details on employees, market risks, and government regulations, noting Woodside had approximately 4,427 employees as of December 31, 2022, primarily in Australia and the USA due to the BHP merger, and manages exposure to commodity price, foreign exchange, and interest rate risks through derivatives, while operating under extensive government regulations covering environmental protection, decommissioning, and domestic gas supply obligations - As of December 31, 2022, Woodside had approximately 4,427 employees, with the majority in Australia (3,338) and the USA/Canada (849)[1241][1243] - Woodside's revenue is highly exposed to commodity price volatility, and for 2022, approximately 75% of production was natural gas (LNG, NGLs, pipeline gas) and 25% was oil and condensate[1246] - In Australia, Woodside is subject to the WA Domestic Gas Policy, requiring it to reserve gas equivalent to 15% of LNG production from export projects for domestic use[1273] - The company is involved in several legal proceedings, including challenges from environmental groups regarding the Scarborough gas project and approvals for the Pluto and North West Shelf gas plants[1292] Shareholder Statistics As of February 16, 2023, Woodside had 649,871 shareholders holding 1,898,749,771 shares, with the top 20 holding 71.58% of issued capital, and the majority of shareholders and shares registered in Australia, with details also provided on its American Depositary Receipts (ADR) program Shareholder Distribution (as of 16 Feb 2023) | Size of Shareholding | Number of Holders | % of Issued Capital | | :--- | :--- | :--- | | 1 - 1,000 | 536,529 | 6.42% | | 1,001 - 5,000 | 97,883 | 10.73% | | 5,001 - 10,000 | 10,362 | 3.76% | | 10,001 - 100,000 | 4,953 | 5.18% | | > 100,000 | 144 | 73.91% | | Total | 649,871 | 100% | - The top three shareholders are HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED (28.45%), J P MORGAN NOMINEES AUSTRALIA PTY LIMITED (20.03%), and CITICORP NOMINEES PTY LIMITED (8.41%)[1300] - Substantial shareholders who have given notice include BlackRock, Inc. (5.28%), State Street Corporation (5.04%), and Vanguard Group (5.04%)[1301] Business Directory This section provides a directory of Woodside's global office locations, including its head office in Perth, Australia, and key offices in the Americas (Houston, Calgary, Mexico City), Africa (Dakar), Asia-Pacific (Beijing, Singapore, Tokyo), and Europe (London) Asset Facts This section details Woodside's asset portfolio, categorized into producing facilities, projects, developments, new energy opportunities, and exploration permits, providing key facts for each asset including Woodside's role, equity interest, infrastructure, and production capacity, with major producing assets including Pluto LNG, North West Shelf, and international assets like Greater Shenzi - Key Australian producing assets include Pluto LNG (90% equity, 4.9 Mtpa capacity), North West Shelf (33.33% equity, 16.9 Mtpa capacity), and Wheatstone (13% non-operated interest)[1368] - Major international producing assets include Greater Angostura (operated, 45-68.5% equity), Greater Shenzi (operated, 72% equity), Atlantis (non-operated, 44% equity), and Mad Dog (non-operated, 23.9% equity)[1369] - Projects in the execution (Post-FID) phase are Scarborough (100% equity in field, 51% in Train 2) and Sangomar (82% equity), and the Trion project (60% equity) is in the Pre-FID stage[1370][1371] Alternative Performance Measures This section defines and reconciles non-IFRS financial measures like EBIT, EBITDA excluding impairment, Underlying NPAT, and Free Cash Flow, used to provide insight into Woodside's underlying performance, by reconciling them to corresponding IFRS figures from the financial statements, such as the 2022 Underlying NPAT reconciliation from reported NPAT by adjusting for exceptional items - The report uses non-IFRS measures like EBIT, EBITDA excluding impairment, Underlying NPAT, Net debt, and Free cash flow to provide insight into underlying business performance[1379] Reconciliation of NPAT to Underlying NPAT (2022, US$m) | Description | Amount | | :--- | :--- | | Net profit after tax attributable to equity holders | 6,498 | | Add: Merger transaction costs | 419 | | Add: Orphan Basin exit fee | 142 | | Less: Derecognition of Corpus Christi onerous contract provision | (245) | | Less: Impairment reversal (post-tax) | (630) | | Less: Pluto PRRT DTA recognition | (954) | | Underlying NPAT | 5,230 | Calculation of Free Cash Flow (2022, US$m) | Description | Amount | | :--- | :--- | | Cash flow from operating activities | 8,811 | | Cash flow used in investing activities | (2,265) | | Free cash flow | 6,546 | Glossary, Units of Measure and Conversion Factors This section provides definitions for key terms, abbreviations, units of measure, and conversion factors used throughout the annual report, clarifying financial, operational, climate-related terms, and units Information About This Report This section contains important cautionary information, including a disclaimer regarding forward-looking statements subject to risks and uncertainties, clarification that all greenhouse gas emissions data are estimates, and confirmation that financial statements are prepared in accordance with IFRS with all monetary figures in US dollars unless otherwise stated - The report contains forward-looking statements that are subject to inherent risks and uncertainties and are not guarantees of future performance[1394] - All greenhouse gas emissions data presented are estimates, and the methodologies for quantification may evolve over time[1401] - The financial statements are prepared in accordance with IFRS, and all dollar figures are in US currency unless specified otherwise[1404][1405] Ten-Year Comparative Data Summary This section presents a comprehensive ten-year summary of Woodside's key financial and operational data from 2013 to 2022, including metrics from the profit and loss statement, balance sheet, cash flow, production and sales volumes by product, and other key data points like reserves, share price, and market capitalization