Woodside (ASX:WDS) shares were down nearly 3% at one stage on Tuesday after the company released a solid-looking June quarter report but a not-so-solid six-month update with a big hint of a sharp drop in interim earnings.
The company reported a 2% quarter-on-quarter increase in revenue to $US3.03 billion.
Quarterly production was down 1% from the March quarter at 44.4 million barrels of oil equivalent (MMboe) or 488 thousand barrels of oil equivalent per day. June quarter production was down 2% from the second quarter of last year when the company reported revenue of $US3.084 billion.
Woodside said that this was due to planned maintenance activities, weather impacts at North West Shelf, and unplanned outages at Wheatstone and Julimar. These slowdowns were said to be partly offset by higher seasonal demand at Bass Strait and the first oil at Sangomar.
Woodside reaffirmed full-year production guidance of 185 to 195 MMboe and capital expenditure of $US5.0 to $US5.5 billion.
In terms of the more important point of the company’s interim profit, six-month production was down 2% at 89.3 MMboe, but revenue tumbled 19% to $US6.002 billion from $US7.41 billion for the first half of 2023.
Woodside reported record statutory and underlying profits for the first half of 2023 at $US1.74 billion and $US1.9 billion. The $US1 billion drop in revenue for the June 2024 half year means there’s no hope of matching that result.
The fall was partly due to the small drop in production, but the big driver was the 15% drop in the company’s average per barrel price of $US63, down from $US74 a year ago. That price drop will drive a hole in interim earnings this year.
The fall in revenue could also threaten the interim dividend, which was 80 US cents a share for the first half of 2023.
CEO Meg O’Neill was content to discuss anything but the half-year figures in her comments with Tuesday's report.
She said the company is on track to achieve its full-year production guidance of 185-195 million barrels of oil equivalent (MMboe), with output for the second quarter of 44.4 MMboe.
“The first oil from our Sangomar project offshore Senegal was a significant milestone, delivering against our growth strategy. Subsequent to the quarter, we achieved a peak gross rate of 75,000 barrels per day, and production ramp-up continues as planned.
“The addition of Sangomar to Woodside’s portfolio will deliver enduring shareholder value and significant economic benefits for Senegal.
“Work on our other major growth projects continued at pace. The Scarborough Energy Project in Western Australia is now more than two-thirds complete, and we remain on target for the first LNG cargo in 2026.
“We are also progressing our opportunities in new energy, securing all primary environmental approvals for the Hydrogen Refueller @H2Perth, while continuing offtake discussions for H2OK in the US.
“We see ongoing demand for Woodside’s LNG in Asian markets, as evidenced by our long-term sale and purchase agreement with CPC Corporation, Taiwan, and the $1 billion loan agreement executed with JBIC to fund Woodside’s Scarborough Energy Project,” Ms. O’Neill said.
