More post-merger wins for Woodside

Woodside Energy boss Meg O'Neill says upheavals in global energy markets in the past six months have shone a spotlight on the role of gas, as the business lifts profits to $US1.8 billion.

Now Australia’s largest oil and gas business courtesy of a mega-merger with BHP’s petroleum assets earlier this calendar year, Woodside notched up underlying net profits by 414 per cent compared to the first half of 2021.

The company’s $US1.8 billion bottom line was driven by operating revenues of $US5.8 billion, compared to $US2.5 billion last year, after producing 54.9 million barrels of oil equivalent (MMboe) during the period.

Around 9.7 MMboe of that was from assets bought from BHP, which helped spur a 19 per cent increase in production.

Woodside chief executive Meg O'Neill said realised prices across the company’s portfolio had doubled to $US96.4 per barrel of oil equivalent.

“The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on the importance of gas in the world’s energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70 per cent of Woodside’s portfolio,” she said.

Updating investors on Scarborough and Pluto Train 2 projects, Ms O'Neill said that all major equipment items had been procured and construction works were underway.

A ground-breaking ceremony was held for the liquefied natural gas train earlier this month.

Woodside is planning to invest $5 billion in ‘new energy products’ by 2030 and is in the early stages of a handful of renewable energy projects in Western Australia and the US.

Environmental studies for the H2Perth project, a proposed liquid hydrogen and ammonia production facility in Perth, are continuing.

Engineering and construction multinational McDermott was engaged for pre-front end engineering design (FEED) for the project in May.

Woodside is targeting a final investment decision in May 2023.

FEED work for another liquid hydrogen project, H2OK in Oklahoma, started in January 2022 with electrolysis and liquefaction equipment contracts pending.

The first phase of the project will be to build a 290-megawatt facility producing up to 90 tonnes per day of hydrogen.

A final investment decision for H2OK is also targeted for 2023.

“Safe and reliable supplies of gas are not only critical to global energy security but will play a key role as our customers seek to decarbonise,” Ms O'Neill said.

 “Our strategy to thrive through the energy transition as a low-cost, lower-carbon energy provider continues to progress through recently announced initiatives across hydrogen refuelling, carbon capture and storage and carbon to products technologies.”

Investors will see around $2.1 billion of profits in the form of an interim fully-franked dividend of $US1.09 US cents per share.

“The dividend payout is based on 80 per cent of underlying NPAT plus 80 per cent of the merger completion payment adjusted for working capital, equivalent to returning approximately 81 per cent of free cash flow,” Ms O'Neill said.

Woodside shares are up 1.92 per cent to trade at $36.03.