The Woodside Energy Group Ltd (ASX: WDS) share price is barely oscillating on Wednesday morning following the release of its fourth-quarter report.
Shares in the oil and gas producer opened at $31.15, appearing unsure which way to whip amid the latest update. At the time of writing, the Woodside share price sits at $31.09, putting it 8% above its 52-week low.
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Woodside share price stoic amid result
Here are the main takeaways from the quarter ended 31 December 2023:
- Record full-year 2023 production up 18.7% to 187.2 million barrels of oil equivalent (MMboe)
- Quarterly production down 6.8% to 48.1 MMboe
- Quarterly revenue of $3,355 million, down 35% versus prior corresponding period
- Sales down 7% quarter-on-quarter to 49.5 MMboe
- Average realised price of $66.8 per barrel of oil equivalent
Pumping out 187.2 MMboe, it ended up being a record year of production at Woodside. However, the fourth quarter witnessed a decline in production versus Q3 due to reduced volume from the Bass Strait during planned maintenance works and weaker gas demand in the summer.
Additionally, production at the North West Shelf fell to 7.8 MMboe from 9.6 MMboe due to 'natural field decline'.
What else happened in Q4?
Several Woodside projects continued through development in the quarter. The Scarborough and Pluto Train 2 project reached 55% completion at the end of the fourth quarter. Woodside is currently targeting first LNG cargo for 2026.
Meanwhile, phase one of the Sangomar project was 94% complete at the end of 2023. Management is eyeing mid-2024 to produce its first barrel of black gold.
Another big item of the quarter was confirmed merger talks between Woodside and Santos Ltd (ASX: STO).
Providing an update in today's announcement, Woodside CEO Meg O'Neill stated, "The talks are still at an early stage and there is no certainty that the transaction will progress. Woodside will be disciplined, conduct thorough due diligence, and will only pursue a transaction that is value-accretive for shareholders."
What's next?
Charting course for 2024, Woodside provided full-year guidance for the year ahead. Production is expected to land between 185 MMboe and 195 MMboe, representing a 1.5% increase at the midpoint.
Furthermore, Woodside provided a production split by product type as follows:
- LNG – approximately 45%
- Pipeline gas – approximately 20%
- Crude and condensate – approximately 30%
- Natural gas liquids – approximately 5%
The company expects to outlay between US$5 billion and US$5.5 billion in capital expenditure in 2024. At roughly 40%, the Scarborough project is anticipated to soak up the largest portion of funds.
Woodside share price snapshot
Shares in Australia's largest listed energy company are down 16% over the last 12 months. Much of this weakness manifested between September and December last year — a time when crude oil prices retreated from US$91 per barrel back to US$70.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.5% compared to a year ago. Perhaps a fairer comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) is down 7%.
Due to the Woodside share price falling, the company's price-to-earnings (P/E) ratio has diminished to 6 times earnings. Yet, this is still mostly in line with the Australian oil and gas industry average multiple.
