The Woodside Energy Group Ltd (ASX: WDS) share price is having a disappointing day on Tuesday.
In morning trade, the energy giant's shares are down 5% to $35.12.
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Why is the Woodside share price tumbling into the red?
The Woodside share price is being sold off today after the company completed a review of its 2023 corporate plan. This includes its costs, production, and sales forecasts for the year ahead, which has led to the release of the energy producer's guidance for FY 2023 this morning.
Firstly, in respect to its capital expenditure, Woodside expects to spend US$6 billion to US$6.5 billion on capex in FY 2023. This assumes no change to current participating interests. Approximately half of this will be put towards the Scarborough operation.
Moving on, Woodside expects production of 180 – 190 million barrels of oil equivalent (MMboe) in FY 2023. This is the first full year of production since the BHP Group Ltd (ASX: BHP) petroleum transaction and compares to its FY 2022 production guidance of 153 – 157 MMboe.
However, it is worth noting that Woodside recently delivered third quarter production of 51.2 MMboe, which annualises to 204.8 MMboe. So, investors could be a touch underwhelmed with FY 2023's production guidance, which may explain the weakness in the Woodside share price today.
This guidance comprises LNG production of 83-85MMboe, pipeline gas production of 40-42MMboe, crude and condensate production of 50-55MMboe, and natural gas liquids production of 7-8MMboe.
It is worth noting that it doesn't include any production from the Sangomar Field Development Phase 1, which is targeting first oil in late 2023. In addition, management notes that Mad Dog Phase 2 is undergoing commissioning and Woodside assumes for production guidance purposes a start-up in mid-2023.
No production costs guidance was provided for FY 2023.
