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Woodside Energy Group Ltd (ASX:WDS) has seen its share price decline by over 2% following the release of its quarterly update for June 2024. As a major player in the global oil and gas sector, Woodside's latest performance figures provide insight into the company's current operational status and future prospects.
For the June 2024 quarter, Woodside, an ASX energy stock, reported a production volume of 44.4 million barrels of oil equivalent (MMboe), down 1% from the previous quarter. The drop was due to planned maintenance, bad weather impacting the North West Shelf, and unexpected outages at the Wheatstone and Julimar facilities. Despite these challenges, increased seasonal demand at Bass Strait and the start of first oil production at the Sangomar project helped offset some of the decline.
The company's full-year production guidance remains steady, with expectations set between 185MMboe and 195MMboe.
Revenue for the quarter reached US$3.03 billion, marking a 2% increase from the previous quarter. This growth was primarily driven by the timing of Pluto cargoes, despite being offset by lower realized prices. The average realized price for the quarter was US$62 per barrel of oil equivalent, down 2% from the first quarter of 2024.
Project Developments
Several key projects have seen notable progress:
- Sangomar Project: Woodside achieved first oil from the Sangomar offshore project in Senegal in June. Production has been ramping up as planned, reaching a peak gross rate of 75,000 barrels per day post-quarter.
- Scarborough Project: The Scarborough project, which is currently 67% complete, is expected to deliver its first LNG cargo in 2026. The total estimated cost of the project has increased by 4% to US$12.5 billion.
- Trion Project: Located in the Gulf of Mexico, the Trion project continues to advance through engineering, procurement, and contracting phases.
- Hydrogen Projects: Woodside has secured all primary environmental approvals for the hydrogen refueller at H2Perth and is progressing with offtake discussions for the H2OK project.
Additionally, Woodside has announced plans to acquire Tellurian, a US-listed LNG business, and its Gulf Coast Driftwood LNG development for US$900 million. This acquisition aims to enhance Woodside’s position as a global LNG leader by expanding its scalable US LNG development portfolio.
Management Insights
Woodside CEO Meg O’Neill highlighted several key developments:
- The achievement of first oil from the Sangomar project is a significant milestone and aligns with the company’s growth strategy. The ramp-up in production is proceeding as planned, with the addition of Sangomar expected to deliver substantial shareholder value and economic benefits for Senegal.
- Woodside anticipates continued demand for its LNG in Asian markets, as demonstrated by recent agreements with CPC Corporation, Taiwan, and a US$1 billion loan agreement with JBIC to fund the Scarborough Energy Project.
- The planned acquisition of Tellurian and Driftwood LNG is seen as a strategic move to position Woodside as a major player in the global LNG market, further strengthening its portfolio with scalable US LNG development.
Woodside Energy Group Ltd's recent quarterly update reflects a mixture of progress and challenges. While production and revenue figures show some positive developments, the company's share price has been affected by various factors including operational issues and fluctuating prices. The strategic projects and acquisitions outlined in the report suggest that Woodside is positioning itself for future growth, particularly in the LNG sector. Investors will be keenly watching how these developments impact the company’s performance in the coming quarters.
