Woodside Energy (US:WDS)2024-02-27 13:03Financial Performance - In 2023, Woodside achieved record production of 187.2 MMboe, despite lower realized oil and gas prices impacting EBITDA, which was US$9.363 million, below the target of US$1.860 million[633][635]. - EBITDA excluding impairment for 2023 was US$9,363 million, down 16.7% from US$11,234 million in 2022[657]. - Net profit after tax (NPAT) for 2023 was US$1,660 million, a decrease of 74.5% compared to US$6,498 million in 2022[657]. - Underlying NPAT for 2023 was US$3,320 million, down 36.5% from US$5,230 million in 2022[657]. - Basic earnings per share for 2023 were 87.5 cents, a decline of 79.6% from 430 cents in 2022[657]. - The Group reported operating revenue of $13,994 million, a decrease of 16.8% from $16,817 million in 2022[786]. - The Group recognized a gross profit of $6,475 million, down 37.1% from $10,277 million in the previous year[786]. - The Group's profit after tax for the period was $1,722 million, a decline of 73.8% compared to $6,575 million in 2022[788]. - The Group's total assets decreased to $55,361 million in 2023 from $59,321 million in 2022, reflecting a reduction of 6.6%[790]. - The Group's cash and cash equivalents decreased to $1,740 million at the end of 2023, down from $6,201 million at the end of 2022[792]. - The Group's total comprehensive income for the period was $2,377 million, a decrease from $6,428 million in 2022[788]. - The total comprehensive income for the year ended 31 December 2023 was $2,377 million, which includes a profit for the period of $1,660 million[794]. - The equity holders of the company reported retained earnings of $4,118 million as of 31 December 2023, reflecting a decrease from the previous year[794]. - The company paid dividends totaling $4,335 million during the year, with a dividend reinvestment plan contributing $476 million[794]. Production and Projects - Production in 2023 reached 187.2 MMboe, an increase of 18.7% from 157.7 MMboe in 2022[657]. - The Scarborough Energy Project is on track for first LNG cargo in 2026, while first oil from the Sangomar project is targeted for mid-2024[636]. - Woodside achieved a production of 187.2 MMboe in 2023, within the guidance of 180 - 190 MMboe, driven by higher Pluto-KGP Interconnector production[716]. - The Scarborough and Pluto Train 2 projects are 55% complete, targeting first LNG cargo in 2026[716]. - The progress of the Sangomar project is reported at 93% completion, with significant advancements in various growth initiatives[731]. - The Group achieved first production from the Mad Dog Phase 2 project, producing 3.1 MMboe of hydrocarbons during the year[785]. Environmental and Safety Initiatives - Woodside secured environmental approvals for the proposed Woodside Solar Project near Karratha, advancing its new energy initiatives[636]. - The company continues to advance several carbon capture and storage (CCS) opportunities alongside its hydrogen project in Oklahoma[636]. - The health and safety performance measure recorded a total recordable injury rate (TRIR) of 1.86, above the target of 1, reflecting safety performance below expectations[716]. - Woodside's gross equity Scope 1 and 2 emissions performance was 6,190 kT CO2-e, 5% better than the target[716]. - The 2024 Corporate Scorecard includes distinct measures for safety and climate, each accounting for 15% of the total scorecard[637]. - The 2024 Corporate Scorecard includes five measures, with safety and climate metrics each accounting for 15% of the total scorecard[711][713]. Executive Remuneration and Incentives - The CEO's Fixed Annual Reward (FAR) will increase by 3% effective January 1, 2024, while the Variable Annual Reward (VAR) component remains unchanged[644]. - Senior Executive FAR increased by 5% for specific executives effective April 1, 2023, with the VAR structure remaining unchanged[645]. - The Executive Incentive Scheme (EIS) aligns executive remuneration with shareholder returns, with a target variable reward opportunity for the CEO set at 280% of Fixed Annual Reward[679]. - The Board reduced the CEO's EIS award to 99% of the target opportunity in light of the fatality, reflecting a commitment to safety[642]. - The CEO's EIS award was reduced to 99% of the target opportunity due to a fatality at the North Rankin Complex, resulting in 66% of the maximum opportunity[723]. - The CEO received a one-off cash bonus of A$200,000 in June 2023 for significant contributions to the merger of Woodside and BHP's petroleum business[724]. - The average actual and variable remuneration for Senior Executives in 2023 was 26.5% fixed reward and 73.5% variable reward[729]. - Graham Tiver, CFO, earned an EIS of 105.5% of the target opportunity, maintaining a strong balance sheet with 80% of underlying NPAT returned to shareholders[733]. - Liz Westcott, EVP Australian Operations, achieved an EIS earned percentage of 105.5% of the target opportunity, focusing on safety and operational efficiency[737]. - The total fixed annual rewards for 2023 included cash incentives of A$5,200,000 for M O'Neill, which included a one-off cash bonus for significant contributions towards the merger[742]. - The total remuneration for Key Management Personnel (KMP) in 2023 was $9,368,253, down from $9,156,300 in 2022, representing a 2.3% decline[772]. Corporate Governance and Compliance - The Board adopted a Mandatory Clawback Policy in 2023 to recoup erroneously awarded incentive-based compensation in case of accounting restatements[703]. - KPMG was engaged for A$15,000 to provide remuneration recommendations for Senior Executives, ensuring compliance with the Corporations Act 2001[767]. - The remuneration recommendations provided by KPMG were made free from undue influence from Executive KMP, ensuring the integrity of the review process[766]. - Woodside's financial statements comply with International Financial Reporting Standards (IFRS) and Australian Accounting Standards[798]. - The company’s functional currency is the US dollar, and all financial transactions are recorded in this currency[801]. Market and Strategic Outlook - The company aims to optimize value while balancing strong shareholder returns and investing in quality opportunities[661]. - Woodside's strategy includes advancing new energy products and lower carbon services to meet future demand[660]. - The company plans to continue expanding its market presence and enhancing its product offerings through ongoing research and development efforts[773]. - The company has considered climate-related risks in its financial planning, which may impact future asset valuations and pricing assumptions[810]. - Woodside's long-term price assumptions are based on scenarios that include decarbonization goals and energy security, reflecting current legislation in its operating locations[811]. - The company anticipates volatility in commodity prices due to the energy transition, with significant uncertainty regarding future pricing scenarios[817]. - The sale of a 10% non-operating interest in the Scarborough Joint Venture to LNG Japan in August 2023 supported the carrying value of the asset, indicating strong market valuation[815].