Lower oil and gas prices weigh on Woodside profit

Lower oil and gas prices have dragged down underlying profit at Woodside Energy, dropping 13 per cent to $US2.88 billion ($4.54b) — a fall from the previous year’s $US3.32b.

Australia’s biggest energy producer on Tuesday revealed overall production for the 12 months came in at a record 193.9 million barrels of oil equivalent.

But revenue was off 6 per cent compared to the previous year to $US13.18b as realised prices dropped 7 per cent from $US68.6/boe to $US63.6/boe.

Statutory net profit more than doubled to $US3.57b.

Woodside said its results were underpinned by what it described as “outstanding early production performance” at Sangomar off the coast of Senegal — which contributed $US950 million — and the high-rate reliability of its LNG assets, including the North West Shelf project.

The board declared a lower fully franked final dividend of US53¢ a share, down from US60¢, taking the full-year payout to $US1.22, down from the previous year’s $US1.40.

Chief executive Meg O’Neill said Woodside was set to become a highly cash generative business.

“Our proven track record of operational excellence, disciplined investment decisions and world-class project execution is delivering near-term rewards for our shareholders while laying the foundations for a new chapter of value creation,” Ms O’Neill said.

“In 2024, the record annual production was at the top end of the full-year guidance range, underpinned by consistently strong 98 per cent reliability at our operated LNG facilities.

“Unit production cost of $US8.1/boe was down 2 per cent from 2023, underlining operational discipline and the resilience of the base business in a period of inflationary pressures.”

Ms O’Neill said major growth project Scarborough off WA’s North West was now 80 per cent complete and on track for first LNG cargo in 2026. Its Trion project in Mexico is more than 20 per cent complete and targeted for first oil in 2028.

Woodside is also targeting a final investment decision on its 27.6 million tonne-a-year Louisiana LNG project in the US within the next few months.

Saxo Asia Pacific senior sales trader Junvum Kim said the 115 per cent surge in statutory net profit marked a strong production year, despite softer prices but warned iits 80 per cent dividend policy could be challenged by upcoming investments.

“The strategic shift to the US market, through projects like Tellurian’s Louisiana LNG and a Texas ammonia venture, signals a commitment to growth and cleaner energy,” Mr Kim said.

“As projects progress and attract top partners, success will rely on cost management and executing ambitious plans.”