Supersized Woodside rakes in $9.3b revenue for quarter as gas prices soar

Energy giant Woodside’s revenue for the September quarter has soared from a doubling of production from the purchase of BHP’s assets and a doubling of realised prices for liquified natural gas as Europe scrambles to replace supply from Russia.

Santos has also won from the invasion of Ukraine with its gas exports on average fetching a 62 per cent higher price.

Compared with a year ago, Woodside production for the quarter increased 131 per cent to 51.2 million barrels, but revenue jumped 272 per cent to $US5.86 billion ($9.3 billion) due to higher gas prices.

Woodside Energy CEO Meg O’Neill has presented her first set of results that reflect the new bigger Woodside after it absorbed BHP’s assets.Credit:Trevor Collens

Woodside chief executive Meg O’Neill said success in the third quarter allowed an upgrade of full-year production guidance to 153 to 157 million BOE from the previous target of 145 to 153 million BOE.

“Very pleased with how the quarter’s played out,” she said.

Woodside’s purchase of BHP’s petroleum division in exchange for 48 per cent of the company’s scrip to BHP shareholders took effect on June 1, making the September quarter the first report reflecting the combined entity.

Compared to a year ago, production for the quarter increased 131 per cent to 51.2 million barrels, but revenue jumped 272 per cent to $US5.86 billion ($9.3 billion) due to higher gas prices.

Woodside received an average of $US19.10 per million British thermal units for the gas it exported, compared to $US9.70 a year ago. Almost a quarter of its LNG was sold under contracts linked to current market prices.

In comparison, the released price for oil and condensate increased by just 23 per cent to $US95 a barrel.

O’Neill said the quarter’s result was helped by Woodside’s ability to transfer excess gas from its Pluto field to the adjacent underutilised North West Shelf LNG plant near Karratha, increasing production by 2.3 million BOE.

Woodside is doubling the size of the Pluto LNG plant to process gas from the Scarborough field.

“Overall, the Scarborough and Pluto Train 2 projects combined were 21 per cent complete at the end of the quarter and remain on track for targeted first LNG cargo in 2026,” she said.

Woodside received an average of $US19.10 per million British thermal units for the gas it exported, compared to $US9.70 a year ago.Credit:Woodside

Off the coast of Senegal, Woodside is developing the Sangomar oil project.

“The subsea installation campaign began in September and development drilling progressed, with six of the planned 23 wells now complete,” O’Neill said.

“The project was 70 per cent complete at quarter end with first oil targeted for the second half of 2023.”

Traditionally Woodside has focussed on selling gas to Asia but during the past quarter made further moves to increase its exposure to the Atlantic Basin trade.

“Woodside entered into a long-term sale and purchase agreement with Uniper Global Commodities to supply LNG from our global portfolio from 2023 into Europe, where buyers are urgently seeking alternatives to Russian gas,” O’Neill said.

“We also signed an SPA for supply from the proposed Commonwealth LNG export facility in Louisiana.”

Santos’ third quarter revenue of $US2.15 billion ($3.343 billion) was also boosted by the global gas crunch, up 88 per cent from a year ago.

Free cash flow of more than $1 billion ($1.6 billion) for the quarter has helped the Adelaide-based company reduce its gearing to less than 21 per cent.

Santos chief executive Kevin Gallagher said energy security was a top priority in Australia’s region.

“Given the ongoing strong customer demand for our product
now and into the future, Australia’s role as a major energy-producing nation has never been more important,” he said.

Woodside shares rose 6.2 per cent to $34.56 a share on Thursday and Santos shares closed 2 per cent up at $7.53 a share.

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