WDS, STO, ALD: A quick look at 3 ASX energy stocks

Highlights 

• Hydrocarbons, which include oil and gas, are the backbone of any economy's growth and development.
• The current hydrocarbon market is witnessing bouts of volatility, thanks to the convergence of gloomy global economic sentiments and geopolitical restlessness.
• Australian oil & gas players are developing their hydrocarbon assets to cater to a highly volatile oil & gas market.

Conventional hydrocarbons, which include crude oil and natural gas, are among the most valuable commodities of current times. The development of any economy is majorly dependent on the ease with which these hydrocarbons are accessible to it. 

However, currently we are witnessing never-seen-before events that add to the extreme unpredictability in the global inventories of oil and gas.

With the convergence of the COVID-19 restrictions in China, gloomy global economic sentiments, and geopolitical restlessness, the oil & gas market is seeing bouts of volatility.

Amid all these market dynamics, hydrocarbon-deprived countries are leaving no stone unturned to fulfil their oil & gas inventories. This has led to a condition where oil & gas players are accelerating development activities across their project portfolios.

With this backdrop, let's skim through some ASX-listed oil & gas stocks and their recent developments:  

Woodside Energy Group Ltd (ASX:WDS): The company holds a portfolio of long-life assets in Australia, the United States, Senegal, and the Caribbean.

The company highlights that out of these projects, the Sangomar project (Senegal) and Scarborough/Pluto Train 2 (Australia) are on target for first production in 2023 and 2026, respectively.

As per the company update released early December 2022, the various attributes that support its production growth are as follows:

• From 2023 to 2027, the company is anticipating a more than 4% CAGR.
• WDS expects production at 180–190 MMboe for FY23.
• Woodside is anticipating a pipeline of opportunities post 2027.

Santos Limited (ASX:STO): In its Investor Briefing Day presentation, Santos highlighted that the macroenvironment is currently volatile and energy security is the most critical concern for nearby countries. It also drew attention to the strong consumer for Santos’ products in the market.

Santos generated US$2.7 billion in free cash flow to September end, emphasising that its business is performing strongly.  

The company gave a production guidance of 91–98 MMboe for 2023, with major projects' capital expenditure estimated to be around US$1.835 billion.

It recently received a conditional offer from Kumul Petroleum Holdings Limited for the acquisition of a 5% interest in PNG LNG. The offer is placed at an asset value of US$1.4 billion, including a proportionate share of project finance debt of US$0.3 billion.

Ampol Limited (ASX:ALD): Ampol, which is one of Australia and New Zealand’s leading transport fuel and convenience retailer companies, believes in creating opportunities based on its integrated supply chain.

Its infrastructure across Australia and New Zealand includes 1 refinery, 6 pipelines, and 24 terminals. The company holds a storage capacity of 1,800 million litres.

The Lytton refinery can process light sweet crudes and has a capacity of ~109,000 barrels per day. The refinery is located in Brisbane, Queensland, in close proximity to retail and commercial/industrial demand pools.

The group has reported record financial performance in 1H 2022, with AU$927 million as replacement cost operating profit (RCOP) EBITDA, which translates to an 85% increase compared to 1H 2021 numbers.