Woodside Energy Group Ltd (ASX: WDS) shares have received a boost on Monday following a legal victory concerning the Scarborough Energy Project.
The company announced that it has reached an agreement with the Australian Conservation Foundation (ACF) to dismiss challenges made against its Scarborough project.
Whilst not make-sensitive in any way, this development removes a major hurdle for Woodside, allowing the project to progress without further legal delays.
At the time of writing, shares in the energy giant are fetching $26.37 apiece, up more than 1%. Let's have a look at what's unfolded.
Win clears path for Scarborough project
The Scarborough project is Woodside's mammoth energy project that is developing the Scarborough gas field. Woodside shares have been sensitive to updates on this asset.
Woodside announced today that it reached an agreement with the ACF to drop a challenge made against the primary environmental approval on its Scarborough project.
It commenced the challenges against Woodside back in June 2022.
The project — which has been under intense scrutiny in recent times — now has all primary environmental approvals in place, the company says.
Offshore work is already well underway, and with the legal challenge dismissed, the project is on track to deliver its first LNG cargo by 2026.
It was 87% complete at the end of June 2024.
Woodside CEO Meg O'Neill emphasised the project will significantly contribute to energy security in Western Australia.
Litigation against energy projects like Scarborough is an ineffective way to pursue solutions to global climate and energy challenges. Such approaches create needless uncertainty for businesses, communities and the people who depend on the energy these projects produce.
The project is supported by and aligns with the energy policies of both the Australian and Western
Australian Governments.
The dismissal of this case by mutual agreement between Woodside and the ACF highlights the project's environmental credentials. While Woodside isn't a green energy share, this project has been hailed as a low-emission one.
It reportedly has a reservoir containing "less than 0.1% carbon dioxide", making it one of the "lowest carbon intensity sources of LNG" supplied to North Asia.
Analysts remain positive on Woodside shares
Even before the announcement, brokers were bullish on Woodside shares. Morgans, for instance, rates Woodside a buy with a price target of $35. This represents a 33% upside from the current share price.
The broker highlights Woodside's strong earnings and dividend prospects as key reasons for this positive outlook.
It forecasts fully franked dividends of $1.28 per share in FY24, increasing to $1.54 per share in FY25.
Meanwhile, consensus also rates Woodside a buy, according to CommSec.
Foolish takeaway
The successful dismissal of the ACF's legal challenge marks a significant milestone for Woodside. It clears the path for the continued development of the Scarborough Energy Project.
Brokers are generally bullish on Woodside, eyeing a combination of dividends and potential capital gains on the horizon.
Woodside shares are down more than 31% in the past 12 months.
