ASX energy share Woodside Energy Group Ltd (ASX: WDS) has seen a lot of volatility in the last few weeks, including yesterday following news that the Santos Ltd (ASX: STO) takeover had been abandoned.
Woodside is a significant oil and gas ASX share with projects across the world. Environmental considerations aside, the business is delivering impressive operational performance and this was apparent in the recent FY25 half-year result.
Let's remind ourselves what the business delivered.
Image source: Getty Images
HY25 result recap
In the six months to 30 June 2025, it reported operating revenue growth of 10% to US$6.6 billion, though underlying net profit fell 24% to $1.25 billion and reported net profit fell 32% to US$1.3 billion.
Woodside said it delivered production of 99.2 million barrels of oil equivalent (MMboe) – up 11% year-over-year, while unit production costs reduced to US$7.7 per BOE.
The decline in profitability was caused by 1% lower average realised prices, restoration provision updates (primarily due to Stybarrow, Griffin and Minerva), impairment losses on the H2OK project and the Scarborough selldown.
The fall in net profit led to a 23% cut to the declared interim dividend to US 53 cents per share.
Is the Woodside share price a buy?
I think Woodside's projects and overall global supply and demand will decide the success of the business for the foreseeable future.
The ASX energy share notes that primary energy consumption per person has grown 14% in non-OECD Asia Pacific countries since 2020, but there's still a significant lag to OECD Asia Pacific countries and the US. Further growth is expected, plus more than 50% of the world's population lives in non-OECD Asia Pacific countries, who reportedly have aspirations to lift standards of living.
Woodside points out that gas and LNG are "critical and flexible transition fuels which support energy security, affordability, and emissions reduction goals."
The ASX oil and gas share also notes that LNG demand is expected to increase by around 60% by 2040, with Woodside's Scarborough and Louisiana LNG projects to deliver into that demand growth.
In the HY25 result, the company reported "strong progress" on its major projects, with Scarborough 86% complete, Trion 35% complete and Beaumont New Ammonia 95% complete.
However, analysis from UBS suggests a "tight global LNG supply through 2027" before new liquefaction capacity, particularly in the US and Qatar, outpaces demand growth at the end of the decade. However, it also noted that if LNG prices do soften towards the end of the decade, it could mean coal-to-gas switching is "incentivised".
There are a lot of moving parts to Woodside shares and I'm certainly expecting it to continue being a cyclical business.
At this lower valuation, I think it could be a buy at this lower price with the next couple of years in mind. However, I'm wary of how increased supply could impact the company by the end of the decade, so I'd choose to be more active with this company than a typical buy-and-hold ASX share.
