LA Private

Woodside’s slow start in 2024

Woodside Energy (ASX:WDS) has had a slow start to its 2024 financial year, with weak production and product mix resulting in a double-digit drop in revenue for the three months to March.

The company informed the ASX on Friday that quarterly production fell by 7% from the final quarter of 2023 to 44.9 million barrels oil equivalent (MMboe), “due to lower production at Bass Strait, Pyrenees, and Pluto (on the NW Shelf in WA), partially offset by increased production at Mad Dog Phase 2 (which is in the Gulf of Mexico).

This decline saw quarterly revenue drop by 12% to $US2.969 billion from the fourth quarter of last year, “primarily due to a mix of lower realized prices and lower volumes.”

However, the more accurate comparison is with the same quarter a year ago, not the preceding quarter (which was in a different financial year).

On that basis, Woodside’s production fell by 4% from the March 2023 quarter, from 46.b (MMboe), and revenue slumped by 31% from $US4.33 billion.

The main reason for that slide was a 25% drop in the average price for its production to $US63 a barrel from $US85 a barrel.

The revenue slide was also aided by lower sales, which dropped by 9% to 45.6 MMboe in the latest quarter from 50.4 MMboe a year ago.

Woodside CEO Meg O’Neill said in Friday’s guidance that the full-year outlook remained at 185-195 million boe after the first-quarter performance.

“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 the 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.”