The share price of Woodside Energy Group Ltd (ASX: WDS) is sizzling with optimism today.
Shares in the oil and gas giant are up 4% to $27.44 following Woodside's first-half results for FY24. Despite taking a 19% hit to revenues, investors are choosing to focus on the report's brighter aspects this morning.
Woodside share price soaks in earnings uptick
As my colleague James Mickleboro noted, Australia's largest listed energy company reported a 19% revenue decline for the six months ended 30 June 2024. However, investors could be focusing more on the 11% jump in net profit after tax (NPAT).
While an 11% rise in NPAT is a positive outcome, the company's underlying NPAT might tell more about its performance as it removes one-off charges. Woodside's underlying earnings sank 14% to $1,632 million in the first half.
The big-hitters within Woodside
Pluto LNG and the North West Shelf Project were Woodside's two largest contributors to operating revenue in the first six months of the financial year. Together, the Australian LNG projects generated $2,844 million — accounting for 47.5% of the company's revenue.
Woodside's share of production from Pluto LNG tallied 26.9 MMboe, rising 15% from the prior corresponding period. The boost in production was credited to a resumption of normal activities after turnaround activities stifled volume in the comparable period.
Meanwhile, production on the North West Shelf (NWS) in Western Australia fell 14% to 19.6 MMboe. According to the report, planned offshore maintenance and natural field decline are to blame for the reduction in output from its 'late-life asset'.
Management plans to take one LNG train offline between late 2024 and mid-2025, with the NWS now 40 years old.
Fortunately, as some of Woodside's projects age, the company is also bringing fresh supplies online. In June, the first oil was harnessed from the Sangomar field, situated 100 kilometres off the coast of Senegal.
The announcement elicited a market-beating performance from the Woodside share price on the day. Yet, shares in the oil and gas giant have returned to a negative trajectory since, as portrayed in the chart above.
Expanding on the Sangomar milestone, Woodside CEO Meg O'Neill said:
Production ramp-up at Sangomar has progressed well and subsequent to the period, peak gross production rate of 100,000 barrels per day was achieved, demonstrating Woodside's world-class project execution capability. Sangomar will deliver enduring value for Woodside shareholders and benefits for our partner Petrosen and the people of Senegal.
O'Neill also remarked on the significance of this year for Woodside:
As we officially mark 70 years as an Australian company, I am proud that Woodside is facing the future with the same spirit of innovation and determination that our founders showed.
What's to come for the Woodside share price?
As displayed in the half-year presentation, Woodside's full-year guidance is unchanged. The guidance for FY24 is as follows:
- Production between 185 MMboe and 195 MMboe
- Capital expenditure between US$5.0 billion and US$5.5 billion
- Between 26% to 33% of LNG to be sold at prices linked to gas hub indices
Furthermore, shareholders can expect to receive a 69 US-cent dividend on 3 October. After AUD conversion, the trailing dividend yield is approximately 7% based on the current Woodside share price.
