The Woodside Energy Group Ltd (ASX: WDS) share price is in focus after the oil and gas ASX share announced its FY22 result.
Woodside had a very strong year, with the business benefiting from strong energy prices and the merger with BHP Group Ltd‘s (ASX: BHP) petroleum business.
HY23 result
Here are some of the main highlights from the result:
- Operating revenue jumped 142% to $16.8 billion
- Underlying net profit after tax (NPAT) grew 223% to $5.2 billion
- Net profit after tax rose 228% to $6.5 billion
- Operating cash flow up 132% to $8.8 billion
- Free cash flow of $6.5 billion
- Final dividend of US$1.44 per share, up 37% (80% dividend payout ratio)
- Full year dividend of US$2.53 per share, up 87%
Woodside said that its annual sales volume was 168.9 million barrels of oil equivalent, with a realised sales price of $98.40 per barrel of oil equivalent. That compares to a unit production cost of $8.1 per barrel of oil equivalent.
Net debt at the end of the year was just $571 million, with gearing (debt level) of 1.6%.
Strategic progress
The business noted four strategic achievements during the year:
It completed the merger with BHP’s petroleum business.
Woodside implemented initiatives to deliver $400 million in synergies and value creation.
It progressed the Scarborough and Sangomar projects.
Finally, it noted the completed sell-down of Pluto Train 2 in January 2022.
Finishing each of these could help the Woodside share price.
Management commentary
The Woodside CEO Meg O’Neill said:
In Western Australia the Scarborough and Pluto Train 2 projects are now 25% complete and they remain on track for targeted first LNG production in 2026. This year we will focus on progressing secondary regulatory approvals, continuing fabrication of Pluto Train 2, and starting work on subsea installation and drilling operations.
Our project teams did an outstanding job this year delivering tiebacks to our Western Australian LNG assets and installing the Shenzi subsea multi-phase pump, which will improve production rates and recovery, ahead of schedule and under budget.
In 2023 we are also aiming to progress Woodside’s pipeline of growth opportunities, including at Trion, offshore Mexico. We are evaluating bids for major work scopes, finalising execution plans and narrowing cost estimates in support of final investment decision (FID) readiness targeted this year.
We are also preparing for FID readiness at our H2OK project in Oklahoma in 2023. H2OK would be the first major project to be sanctioned under Woodside’s target to invest $5 billion in new energy products and lower carbon services by 2030.
Final thoughts on the Woodside share price
Woodside shares are higher than they were a year ago, and the dividend income is now really good, but I don’t think it’s a buy. When the commodity price has already soared, I don’t think it is a buy – investors are already excited about the business.
