Woodside Energy (WDS)2024-08-27 06:29Financial Data and Key Metrics Changes - The company reported a net profit after tax of 0.69 per share, at the top end of the payout ratio range [4][3] - Unit production costs were reduced by 6% to 740 million [20][52] Business Line Data and Key Metrics Changes - The Sangomar project achieved a nameplate capacity of 100,000 barrels per day, with all 24 wells drilled and completed [11] - The Scarborough Energy project was reported to be 67% complete, on track for first LNG cargo in 2026 [11] - The company is progressing with the Trion project, expecting first oil in 2028 [12] Market Data and Key Metrics Changes - The global demand for reliable, affordable, and lower carbon energy is expected to continue growing, with significant opportunities for coal to gas switching in key markets [6][8] - The Asia Pacific region accounts for more than 80% of global coal use, indicating a sustained opportunity for LNG [9] Company Strategy and Development Direction - The company aims to thrive through the energy transition by focusing on providing energy, creating shareholder value, and conducting business sustainably [3] - Recent acquisitions, including Tellurian and OCI's Clean Ammonia Project, position the company as a leading independent LNG player with significant future cash generation potential [13][15] - The company is committed to achieving its Scope 1 and 2 emissions reduction targets and has set a new abatement target for 2030 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver reliable, affordable, and lower carbon energy, emphasizing the importance of LNG in the energy transition [4][6] - The company acknowledged the challenges in the operating environment but remains focused on maintaining strong operational performance and cash flow generation [20][52] Other Important Information - The company paid AUD2.7 billion in taxes and royalties to Australian governments during the half, demonstrating significant contributions to the economy [23] - The company is actively involved in decommissioning campaigns and has a significant decommissioning campaign underway this year [64] Q&A Session Summary Question: Breakdown of 1.5 billion was related to income tax and the remainder to PRRT, highlighting the company's status as one of the largest taxpayers in Australia [26] Question: Hedging strategy for 2025 and 2026 - Management confirmed the intention to continue hedging in 2025 and will assess the need for hedging in 2026 based on capital spend visibility [28][29] Question: Gearing and dividend payout sustainability - Management indicated that while gearing may exceed the target range temporarily, they remain committed to maintaining the dividend payout ratio [32][34] Question: Confidence in Scarborough project cost estimates - Management expressed high confidence in delivering the Scarborough project within the updated budget of $12.5 billion, while monitoring ongoing risks closely [46][47] Question: Outlook for cash flows and production guidance - Management reassured that the business is performing strongly and is on track to meet cash flow guidance, despite some concerns raised about production levels [52][54]