Woodside Energy Group Ltd (ASX: WDS) shares are having a strong session on Wednesday.
In morning trade, the energy giant's shares are up almost 4% to $20.47.
This follows the release of the company's first quarter update before the market open.
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Woodside shares higher following update
Woodside reported total production of 49.1 million barrels of oil equivalent (MMboe) for the quarter, which was down 4% from the fourth quarter of FY 2024.
However, this dip was largely attributed to weather-related impacts at the North West Shelf (NWS) and unplanned outages at the Pluto LNG facility.
The good news is that these setbacks were partially offset by higher production at Shenzi and Atlantis, and importantly, exceptional output from the Sangomar project, which produced at 78,000 barrels per day on a Woodside equity basis.
Compared to the same time last year, quarterly production was up 9%, thanks to Sangomar coming online in July 2024.
This led to quarterly revenue coming in at US$3.3 billion, down 5% from the fourth quarter. This reflects lower production and softer oil-linked pricing. However, compared to the first quarter, revenue was up 13%, driven not only by the Sangomar start-up but also by high gas hub-linked prices.
'World-class operational performance'
Woodside's CEO, Meg O'Neill, was very pleased with the company's operational performance during the quarter. She said:
We maintained world-class operational performance across our portfolio of high-quality assets, with Sangomar further boosting quarterly revenue through exceptional production of 78 thousand barrels per day at almost 98% reliability. Significant progress was made on our major growth projects, all of which are proceeding to schedule and within budget.
At our Beaumont New Ammonia Project, pre-commissioning activities are expected to commence in the second quarter, with startup targeted for the second half of the year. This value-creating opportunity is set to deliver returns above our capital allocation framework and will position Woodside very competitively in the growing market for lower-carbon ammonia.
Guidance
There has been no change to Woodside's guidance for FY 2025.
It continues to target production of 186MMboe to 196MMboe with a unit production cost of US$8.5 to US$9.2 per barrel of oil equivalent.
O'Neill spoke positively about the future, adding:
As Australia approaches a federal election, it is encouraging to see both major parties recognising the essential role of gas in supporting national prosperity and a stable energy transition. We look forward to certainty for ongoing operations at the North West Shelf beyond 2030, to enable it to support thousands of direct and indirect jobs, billions of dollars in taxes and royalties, and secure future gas supply to Western Australia.
Customer demand for Woodside's LNG remains robust. The 15-year sale and purchase agreement with China Resources announced during the quarter was Woodside's fourth new long-term contract with a regional customer in just over a year. With significant growth in the pipeline, we continue to streamline our business to focus on core and high-value assets.
