Woodside Energy Group Ltd (ASX: WDS) shares are rising on Thursday.
In morning trade, the energy giant's shares are up slightly to $24.09.
This compares favourably to a 0.3% decline by the ASX 200 index.
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Why are Woodside shares outperforming?
There are a couple of reasons for this outperformance.
One is a positive night of trade for oil prices. Both Brent and WTI crude oil rose overnight in response to lower than expected US stockpiles and speculation that OPEC may delay production increases.
Also giving Woodside shares a boost today is news that it has completed the sale of a 15.1% non-operating participating interest in the Scarborough joint venture to Japan's largest power generation company, JERA.
The deal will result in sale proceeds of approximately US$1.4 billion (A$2.1 billion) for Woodside. This comprises the purchase price and reimbursed expenditure.
Woodside continues to hold a 74.9% interest in the Scarborough joint venture and will remain its operator.
Management commentary
Woodside's CEO, Meg O'Neill, believes JERA will be a great addition to the joint venture. She explains:
Participation in the Scarborough Joint Venture is a key part of our strong and highly valued strategic relationship with JERA. That relationship reflects our shared view that gas will play an important role in the global energy transition for decades to come. This latest sale of equity in Scarborough again underlines the long-term value Japanese customers like JERA are placing on gas and the significance of LNG in Japan and the region's energy security.
O'Neill also confirmed that the first LNG cargo from the joint venture is expected in 2026. The CEO said:
In addition to supplying markets in north Asia the project will be an important source of gas for the domestic market in Western Australia. The team is delivering the Scarborough Energy Project to plan and work is now almost three quarters complete. We remain on track for targeted first LNG cargo in 2026.
JERA's senior managing executive officer, Ryosuke Tsugaru, added:
JERA and Woodside share a determination to responsibly navigate the energy transition, with LNG set to be an essential 'firming fuel' across the world for many years to come – particularly in developing regions. As population grows, so does the demand for energy and the first step in the energy transition for many countries is to make the move away from coal-fuelled power to LNG.
Woodside shares remain down 30% since this time last year.
