Woodside Energy (WDS) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a record first half net profit after tax of $1.7 billion, reflecting a 6$7.4 billion, with a record first half EBITDA of $4.9 billion [6][25]. - Earnings per share decreased to$0.92, primarily due to lower realized prices [26]. - The balance sheet remains strong with liquidity of $7.5 billion, allowing for significant investments [25][35]. Business Line Data and Key Metrics Changes - The company produced 91.3 million barrels of oil equivalent, achieving a reliability rate of 97.7$74 per barrel of oil equivalent, indicating strong demand despite lower prices compared to 2022 [6][14]. - The company is progressing major projects, including Sangomar and Scarborough, with Scarborough now 38% complete [16][17]. Market Data and Key Metrics Changes - Global oil and gas prices have stabilized after record highs in 2022, impacting revenue but reflecting ongoing strong demand for LNG [13][15]. - Analysts forecast continued growth in global LNG demand, particularly from developing markets in Asia [15]. Company Strategy and Development Direction - The company aims to maintain a disciplined approach to capital management while investing in growth projects [5][27]. - The strategic focus includes sustainability and decarbonization efforts, with targets set for emissions reduction by 2025 [8][19]. - The company is exploring new energy opportunities, including hydrogen production and carbon capture and storage [19][22]. Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the regulatory environment and ongoing discussions with NOPSEMA for project approvals [46]. - The company is focused on maintaining operational safety and reliability amid ongoing industrial negotiations [57][68]. - Future growth is anticipated in the hydrogen market, with confidence in profitable investments in new energy projects [74][88]. Other Important Information - The company paid a record AUD 3.7 billion in Australian tax and royalties, reflecting strong business performance [8][36]. - The interim dividend of USD 0.80 per share represents a payout of 80% of underlying profits, with a yield of 6.9% [5][12]. Q&A Session Summary Question: Cash flow and tax payments - The CFO clarified that higher cash taxes were due to increased profits in a higher price environment, with no structural changes in the business [43]. Question: Scarborough project timeline - Management provided updates on environmental approvals and expressed cautious optimism regarding the timeline for drilling and installation [45][46]. Question: LNG marketing activities - The company is engaged in discussions with multiple Asian counterparties for LNG offtake, emphasizing the importance of Australian LNG for energy security [50][52]. Question: CCS project costs - Management differentiated between CCS projects for new developments and those offered as a service, indicating that costs are still being assessed [54]. Question: Industrial action risks - Management acknowledged the potential impact of industrial action on production but emphasized constructive engagement with employees [66][68]. Question: Future growth and investment opportunities - Management highlighted a robust portfolio of future investments, including gas and new energy projects, while emphasizing the importance of timing and regulatory approvals [63][64].