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Woodside Energy reports decline in profits amidst production challenges

Similar to Santos last week, the profit decline reported by Woodside Energy (ASX:WDS) was anticipated after the company detailed its production and sales performance in January’s December and full-year report.

Woodside stated that full-year underlying earnings fell 37% to $US3.32 billion, attributed to the impact of the Russian invasion of Ukraine on record earnings of $US5.23 billion.

However, on a statutory basis (after one-off impairments), the company reported net after-tax profits of $US1.660 billion.

Revenue fell 17% to just under $US14 billion for the full year, as higher production and sales could not offset the negative impact of lower oil and gas prices.

Woodside, which recently terminated talks of a potential $US52 billion merger with Santos, reduced its final dividend to 60 cents per share. This brought the full-year payment to $US1.40 a share, less than the final dividend for 2022 of $1.44 a share, and significantly less than the record $US2.53 a share paid for all of 2022.

With a full year’s contribution from the BHP Petroleum assets tucked away in the accounts, Woodside achieved record production of 187.2 MMboe (513 Mboe/d) and “excellent operated LNG reliability of 98%.”

Sales rose to 2015.5 MMboe from just over 168MMboe in 2022 (with only 7 months’ contribution from the BHP assets).

Woodside CEO Meg O’Neill expressed pride that despite inflationary pressures, Woodside continued to provide strong dividends to shareholders while “delivering on our strategy to thrive through the energy transition.”

Woodside had already indicated there would be impairments in the result and on Tuesday said they consisted of non-cash post-tax asset impairments amounting to $US1,533 million ($US1,917 million pre-tax), primarily related to the Shenzi asset in the US Gulf of Mexico.

“For reference, Shenzi represented approximately 5% of 2023 production and approximately 2% of 2023 year-end proved plus probable reserves.”