Woodside Energy (WDS)2024-02-27 06:29Financial Data and Key Metrics Changes - The underlying net profit after tax for 2023 was reported at 0.60 per share, representing a payout ratio of 80% of underlying NPAT [5][20] - Free cash flow generated was 8.30 per barrel of oil equivalent despite inflationary pressures [17] Business Line Data and Key Metrics Changes - Record full-year production was achieved, with LNG reliability being highlighted as excellent [4][12] - The Sangomar project was reported to be 93% complete, targeting first oil in mid-2024 [14] - Scarborough project was 55% complete at year-end, with first LNG cargo expected in 2026 [15] Market Data and Key Metrics Changes - Global LNG demand is forecasted to grow by 53% from now until 2033, primarily driven by China and Southeast Asia [9] - The majority of contracts signed in the global LNG market in 2023 were for durations of 20 years or more, indicating strong long-term demand [10] Company Strategy and Development Direction - The company aims to thrive through the energy transition, focusing on a high-quality portfolio, disciplined capital management, and sustainable business practices [4][6] - The merger with BHP's petroleum business has significantly increased production capacity and operational efficiency [25] - The company is committed to reducing net equity Scope 1 and 2 emissions by 15% below the starting base by the end of next year [27] Management Comments on Operating Environment and Future Outlook - Management acknowledged the extraordinary volatility in the energy market due to geopolitical events, emphasizing the importance of LNG for global energy security [8] - The company is focused on maximizing value from existing assets while exploring new energy opportunities [36][62] - Management expressed confidence in the portfolio and ongoing projects, indicating a disciplined approach to capital management [29][59] Other Important Information - The company launched its Climate Transition Action Plan, highlighting its commitment to sustainability and emissions reduction [6][28] - The balance sheet remains strong with a gearing of 12% and liquidity of $7.8 billion [20] Q&A Session Summary Question: Emissions reduction targets - Management discussed the key drivers for achieving a 3% reduction in Scope 1 and 2 emissions by 2030, focusing on asset decarbonization and new facility designs [32][34] Question: Growth strategy regarding LNG and deepwater oil - Management confirmed satisfaction with the current portfolio and ongoing projects, while remaining open to future growth opportunities [35][36] Question: Pluto production profile and reserve life - Management provided insights on Pluto's production agreement and future production adjustments once Scarborough comes online [38][41] Question: Shenzi and Gulf of Mexico portfolio confidence - Management addressed concerns regarding Shenzi's performance and provided updates on Mad Dog Phase 2 [42][45] Question: Maintenance plans for North West Shelf LNG train - Management confirmed plans for maintenance on LNG Train 2, indicating minimal impact on production due to spare capacity [47] Question: Wheatstone impairment charge explanation - Management clarified that the impairment was related to accounting treatments and not the underlying performance of Wheatstone [48][50] Question: Cash sources and uses - Management confirmed no changes to gas hub prices used for cash flow projections and discussed balancing growth investments with shareholder returns [52][53][57] Question: M&A strategy and rationale - Management reiterated that while M&A opportunities are considered, the current portfolio is strong, and any potential deals must be compelling [60][63] Question: Scarborough sell-down to JERA - Management expressed satisfaction with the strategic partnership with JERA and addressed market reactions to the sell-down [65][66] Question: LNG strategy and portfolio marketing - Management explained the benefits of portfolio marketing over point-to-point sales, highlighting the value created through optimized trading [94][96]