What is the outlook for Woodside shares in FY25?

Woodside shares have suffered volatility. Are things about to get better?

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The Woodside Energy Group Ltd (ASX: WDS) share price has sunk 25% in ten months, as shown on the chart below. After a difficult period for the ASX oil and gas share, investors may be wondering if the next 12 months could be better.

The Australian tax year is about to finish, but Woodside's financial year follows the calendar year. So, while FY25 is about to start for most of us, Woodside still has another six months left of its 2024 financial year.

We're going to look at the outlook for the company, encompassing both Woodside's FY24 and FY25.

Company's outlook commentary

The business has guided that it's expecting to produce between 185 million barrels of oil equivalent (MMboe) and 195 MMboe in 2024. We won't learn about its 2024 annual production numbers until January 2025, when it announces its 2024 fourth-quarter update. How much the company produces and the price it gets for that production can be key for Woodside shares.

It has also guided that it's expecting capital expenditure of between $5 billion and $5.5 billion in 2024.

The business continues to work on its three major growth projects. Commissioning activities have been underway at Sangomar in Senegal for the last few months. The company said it was on track for its first oil in the middle of this year.

Woodside's Scarborough and Pluto Train 2 projects were 62% complete at the end of the 2024 first quarter. The company says it's on target for its first LNG cargo in 2026.

The last update we heard about the sales price for its production was in the first quarter of 2024. Woodside said its average realised price was US$63 per barrel of oil equivalent, which was down 5% quarter over quarter and 25% year over year. There continues to be energy market volatility.

Analyst forecasts for Woodside shares

The broker UBS said in a note in April that there is strong demand for LNG in North Asia, though it also sees "a global LNG surplus arising from 2027+", which it believes is already putting down pressure on fixed slope pricing for new sales and purchase agreements. This "amplifies the need for accelerated LNG marketing activities", according to UBS.

Looking at the forecasts for Woodside's FY24, UBS predicts Woodside can generate US$12.36 billion of revenue, US$4.2 billion of earnings before interest and tax (EBIT), US$2.34 billion of net profit after tax (NPAT) and pay an annual dividend per share of 98 cents. The broker suggested Woodside could finish 2024 with US$2.7 billion of net debt.

UBS is only expecting a slight improvement in FY25. The broker expects revenue to be US$12.9 billion, EBIT to be US$4.27 billion, net profit to be US$2.48 billion and that the ASX oil and gas share could pay an annual dividend per share of US$1.05.

Woodside share price snapshot

The Woodside share price is down around 10% since the start of 2024.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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