Operations highlights
· Delivered quarterly production of 44.9 MMboe (494 Mboe/day), down 7% from Q4 2023 due to lower production at Bass Strait, Pyrenees and Pluto partially offset by increased production at Mad Dog Phase 2.
· Quarterly revenue of $2,969 million, down 12% from Q4 2023 primarily due to a mix of lower realised prices and lower volumes.
· Sold 13% of total equity production on prices linked to gas hub indices (23% of produced LNG).[1]
Project highlights
· The Scarborough Energy Project commenced drilling of production wells and the first Pluto Train 2 modules were delivered to site. The project was 62% complete at the end of the quarter and targeting first LNG cargo in 2026.[2]
· The Sangomar Project FPSO arrived offshore Senegal and commissioning activities are underway. The project was 96% complete at the end of the quarter and targeting first oil in mid-2024.
· The Trion Project continued to progress engineering, procurement, and contracting activities including the award of the subsea marine installation contract.
· Continued offtake discussions for the H2OK project and progressed commercial agreements for the Woodside Solar Project.
Other highlights
· Signed an agreement with JERA, as part of a broader strategic relationship, for the sale of a 15.1% non-operated participating interest in the Scarborough Joint Venture (SJV). Estimated total consideration for the sale is $1,400m.[3]
· Completed the sale of a 10% non-operated participating interest in the SJV to LNG Japan for $910 million in March 2024.[4]
· Signed a sale and purchase agreement (SPA) with Korea Gas Corporation (KOGAS) for the long-term supply of LNG to Korea.
· Published the Climate Transition Action Plan and 2023 Progress Report (CTAP) in February and held an investor briefing on climate strategy in March.
Woodside CEO Meg O'Neill said production in the first quarter totalled 44.9 million barrels of oil equivalent (boe) and guidance for the full year remained at 185-195 million boe.
"Significant progress was made in the period on our three major growth projects. Commissioning activities are now underway at the Sangomar project in Senegal, on track for first oil in the middle of this year. Nineteen of the 23 production wells at Sangomar have now been completed.
"In Western Australia, a milestone was marked with the arrival on site of the first modules for Pluto Train 2 and 13 modules were in place at the end of the quarter. Offshore, two flowlines were installed at the Scarborough field and drilling of the initial wells commenced. Overall, the Scarborough and Pluto Train 2 projects were 62% complete at the end of the first quarter and we remain on target for first LNG cargo in 2026.
"During the period we completed the sale of a 10% non-operated interest in the Scarborough project to LNG Japan and entered into an agreement with JERA for the sale of a further 15.1% of the Scarborough joint venture.
"We are very pleased to have participants of the calibre of LNG Japan and JERA in Scarborough. Their support for the project demonstrates the quality of the asset and the importance of gas to Japan's energy mix.
"We continue to deliver on our strategy to thrive through the energy transition and we published our Climate Transition Action Plan and 2023 Progress Report in February. As Australia's largest energy company, feedback arising from our engagement with investors and stakeholders reflects the challenges and complexities of navigating the energy transition.
"We look forward to further engaging with shareholders at our 2024 Annual General Meeting.
Operations
North West Shelf (NWS)
· Achieved 97% LNG production reliability for the quarter.
· The NWS project participants took a final investment decision (FID) on the Lambert West Project which will support ongoing production from NWS.
· An Offshore Project Proposal was submitted to the regulator in January for a proposed Goodwyn Alpha (GWA) infill development. The development will infill the Karratha Gas Plant (KGP) with resources from several fields in proximity to the GWA platform, which will be tied back to existing GWA subsea infrastructure.
Pluto
· Production was lower than the prior quarter due to reduced reliability (94.6% for the quarter) following an offshore trip and a separate electrical fault onshore.
· Successfully commenced start-up of the produced water handling unit at the Pluto A platform.
· Approvals were granted to extend Pluto gas flows through the Pluto-KGP Interconnector from ~April 2024 to ~December 2025, enabling continued acceleration of LNG and domestic gas production. This also supports the Western Australian market by increasing the allocation of domestic gas from Pluto gas processed at the NWS from 15% to 30% for the period.
· Took FID on the Xena-3 well to support ongoing production from the Pluto LNG Project.
Bass Strait
· Production was lower than the prior quarter due to lower seasonal market demand and offshore maintenance activities.
· Commenced offshore installation of the Kipper Compression modules. The Kipper Compression Project will support the supply of gas to the East Coast domestic gas market from H2 2024.
· In March, the Gippsland Basin Joint Venture (GBJV) ceased production from the West Kingfish platform as planned, due to declining oil production from the Kingfish field. The GBJV continues to optimise facilities through the Gas Asset Streamlining Project as production rates from the Bass Strait decline.
Other Australia
· The Pyrenees FPSO commenced a planned five-yearly maintenance turnaround in a Singapore drydock and is expected to return to production in Q2 2024.
· In January, a produced-water leak was identified subsea at the Pyrenees facility. This was immediately stopped, reported to the Regulator and the cause is being rectified.
International
· At Mad Dog Phase 2, Argos continued to safely and systematically ramp up production following completion of the riser flex joint remediation and achieved peak production of ~130 kbbl/d.
· At Atlantis, the first horizontal well in the field was successfully completed, potentially unlocking future infill opportunities for the asset.
· FID was taken on the Atlantis Drill Centre 1 Expansion (DC1X). DC1X will be a two well tie back to the Atlantis facility through the existing DC1 manifold in the southwest of the field.
· Execution of production optimisation projects to maximise field recovery continued in Trinidad and Tobago with an additional injector to producer well conversion completed in February.
Marketing
· Sold 23% of produced LNG at prices linked to gas hub indices, representing 13% of total equity production. Full year guidance remains unchanged.
· Woodside was granted an exemption under the domestic gas price cap legislation applicable to the east coast of Australia. The exemption provides Woodside the opportunity to increase delivery to the domestic market by more than 260 PJ (100% share) through to 2033 if needed.
· Woodside signed a SPA with KOGAS in February for the long-term supply of approximately 0.5 mtpa of LNG, from 2026. Woodside expects to continue to layer long-term supply agreements into its portfolio and continuously monitors its exposure to the various price markers.
· Woodside achieved record quarterly deliveries of trucked LNG of 327 TJ during the quarter to customers in the North West Australia. Woodside has now delivered approximately 1,700 trailers of LNG, offering a lower-carbon alternative to diesel.[7]
Projects
Scarborough Energy Project
· The Scarborough and Pluto Train 2 project was 62% complete at the end of the quarter and first LNG cargo is targeted for 2026.[8]
· Fabrication of the floating production unit (FPU) hull and topsides progressed. The hull exited its first drydock and installation of the flare boom and monoethylene glycol (MEG) module on the FPU topsides structure was completed.
· The first Pluto Train 2 modules were delivered to site, with 13 modules set in position at the end of the quarter. Site works continued to ramp up.
· Two flowlines were installed in the Scarborough field, and the third installed subsequent to the quarter.
· Drilling of the production wells commenced, and the first subsea tree was successfully installed.
· Trunkline installation was delayed this quarter due to a buckling incident and weather conditions. Trunkline remediation works from the incident have been completed and installation has recommenced.
Sangomar Field Development Phase 1
· The project was 96% complete at the end of the quarter, and first oil is targeted for mid-2024.
· The Léopold Sédar Senghor FPSO arrived offshore Senegal in February and was securely moored. Hookup work was completed and the commissioning program is underway.
· The subsea installation campaign is now complete.
· The development drilling program continued with 19 of 23 wells drilled and completed.
Trion
· Completed the FPU hull and topsides 30% model reviews and hazards analysis of the design.
· Awarded the subsea marine installation contract. Received tenders for the FPU dry transportation, gas gathering line pipe, and drilling and completion services.
· Commenced manufacturing activities including subsea valves, umbilical tubing and line pipe.
Decommissioning
· The Griffin, Stybarrow and Enfield decommissioning campaign continued with 24 subsea structures and facilities recovered in the quarter and the Commonwealth waters section of the Griffin Gas Export Pipeline successfully removed.
· The Transocean Endurance drill rig has mobilised to the Stybarrow field and commenced the ten well plug and abandonment campaign.
· Completed deconstruction of the Nganhurra Riser Turret Mooring at the Australian Marine Complex, with over 95% of material reused or recycled.
Exploration and development
Calypso
· Progressed pre-FEED engineering studies to mature the technical definition of the deepwater infield host.
· Progressed marketing and commercial discussions to evaluate monetisation options.
· Commenced discussions on access to the Atlantic LNG facility (ALNG) following completion of the ALNG restructuring negotiations between the Government of Trinidad and Tobago and ALNG equity shareholders in December 2023.
Sunrise
· Subsequent to the quarter, the Sunrise Joint Venture awarded the Greater Sunrise Concept Study contract (the Study). The Study will consider the key issues for developing, processing and marketing gas either via Timor-Leste or Australia and is targeted to be completed by no later than Q4 2024.[9]
Exploration
· In the US Gulf of Mexico (GoM), the Corvus well (non-operated) completed drilling. The well did not encounter commercial hydrocarbons and analysis of well results is ongoing.
· Woodside was awarded 18 leases in Lease Sale 261 in the central and western GoM areas within the highly contested Paleogene trends.[10]
· Woodside completed exit activities of the Carlisle Bay block in Barbados.
New energy and carbon solutions
H2OK
· In February, Woodside provided comments on the proposed 45V Clean Hydrogen Production Tax Credit guidelines (45V Tax Credit) issued by the United States Department of Treasury and the Internal Revenue Service. Woodside anticipates final guidelines will be issued in the second half of 2024.
· Despite the uncertainty from the 45V Tax Credit, Woodside and potential offtakers have continued discussions on pricing and volumes.
Woodside Solar
· Woodside continued to progress commercial agreements, including for power transmission, to support the proposed project.
Refueller@H2Perth
· Woodside awarded the major services contract for the Refueller@H2Perth in March. This includes detailed engineering, construction, commissioning and start-up work scopes to enable progression towards ready for start-up.
· Woodside is targeting supply of hydrogen to Western Australian industrial and public customers in 2025.
Carbon capture and storage (CCS) opportunities
· The Bonaparte CCS joint venture continues to progress appraisal activities in the G-7-AP permit, which included the successful acquisition of the West Peron Marine 3D Seismic Survey.
· Subsequent to the quarter, the Angel CCS joint venture signed a Memorandum of Understanding (MOU) with Yara Pilbara Fertilisers Pty Ltd to study the feasibility of using CCS with the decarbonisation of Yara Pilbara's existing operations near Karratha in Western Australia.
Corporate activities
Hedging
· As at the end of the quarter, Woodside hedged approximately 29.3 MMboe of 2024 production at an average price of approximately $75.7 per barrel, of which approximately 7.0 MMboe has been delivered.
· Woodside also has a hedging program for Corpus Christi LNG volumes designed to protect against downside pricing risk. These hedges are Henry Hub (HH) and Title Transfer Facility (TTF) commodity swaps. An average of 74% of 2024 and 31% of 2025 Corpus Christi volumes have been hedged.
· The year-to-date realised value of hedged positions for the quarter ended 31 March 2024 is a pre-tax expense of approximately $43 million, with $69 million pre-tax expense related to oil price hedges, $25 million pre-tax profit related to Corpus Christi hedges and $1 million pre-tax profit related to other hedge positions. Hedging losses will be included in "other expenses" in the full-year financial statements.
Climate and sustainability
· Woodside published its Climate Transition Action Plan and 2023 Progress Report (CTAP) in February and summarised its approach to material sustainability topics in the 2023 Annual Report.
· An investor briefing on climate was held in March as part of Woodside's increased engagement with investors on these topics. Shareholders will have the opportunity to vote on the CTAP through a non-binding advisory vote at the 2024 Annual General Meeting.
· Woodside completed the piloting of its Field Leadership Program that aims to strengthen understanding of our work practices and make improvements to our health, safety and environment risk controls. The program commenced in 2023 and will be rolled out across operating facilities through 2024.
· Woodside continued engagement with First Nations communities in Australia with regards to our current and future regulatory approvals. This included executive level engagements with two Aboriginal representative organisations in the Pilbara to further build relationships and discuss ongoing and future social and economic development opportunities.
Chair of Audit & Risk Committee
· As previously announced, Mr Frank Cooper will retire at Woodside's Annual General Meeting on 24 April 2024. With effect from 24 April 2024, Mr Ben Wyatt will Chair Woodside's Audit & Risk Committee.
