Woodside Energy Group Ltd

ACN 004 898 962

Mia Yellagonga

11 Mount Street

Perth WA 6000

Australia

T +61 8 9348 4000

www.woodside.com

ASX: WDS

NYSE: WDS

LSE: WDS

Announcement

Wednesday, 25 January 2023

FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2022

Woodside CEO Meg O'Neill said production in the fourth quarter was a record 51.6 million barrels of oil equivalent (boe).

"The result lifted output for calendar 2022 to 157.7 million boe, surpassing guidance and marking the highest annual production in Woodside's history.

"Consistent strong operational performance and favourable operating conditions across the combined portfolio was a key driver in achieving record quarterly and full-year production.

"Reliability at our Australian operated assets was exceptional with Pluto LNG and the North West Shelf (NWS) Project both achieving 98.3% reliability for the quarter. During the quarter, Woodside celebrated a milestone at Pluto LNG, passing 50 million tonnes of LNG production since the facility started up in 2012. Internationally, asset performance was boosted by completion of planned turnaround work.

"Woodside contributed 29.4 PJ to the east coast Australian gas market in the quarter. Every molecule produced by Woodside's east coast gas business went into the domestic market to support Australian households, businesses and manufacturers.

"Revenue for the period was $5,160 million, down 12% from the third quarter on the back of lower international crude oil and LNG prices and reduced trading activity. Woodside's average realised price was $98/boe, down from $102/boe in the preceding period.

"Ongoing production of Pluto gas through the Pluto-KGP Interconnector continues to deliver additional LNG volumes to a market with strong demand.

"Strong progress was made across our portfolio of growth projects, both in Australia and globally.

"The teams working on Scarborough and Pluto Train 2 have done an outstanding job over the latter part of the year. The combined projects are now one quarter of the way to completion and are on track for targeted first LNG cargo in 2026, bringing essential volumes into a market demanding more LNG.

"Most of the major equipment for the Scarborough floating production unit has been ordered and module construction of Pluto Train 2 has commenced.

"At Sangomar Field Development Phase 1 in Senegal, subsea installation and development drilling has progressed well, with seven of the planned 23 wells now completed. The floating production storage and offloading facility (FPSO) is currently undergoing topsides integration, pre-commissioning and commissioning activities in Singapore. Overall, the project is 77% complete and is on target to start producing oil in late 2023.

"Progress was also made at the proposed Trion project in Mexico, where we are aiming to be ready for a final investment decision (FID) in 2023. During the quarter competitive tenders were issued for the drilling rig, subsea equipment, and installation scopes for subsea, the floating production unit, and the floating storage and offloading vessel.

"In our new energy portfolio, front-end engineering design (FEED) has now been completed at H2OK and contracts were awarded for key equipment, putting us on target to be ready for FID in 2023.

"In Australia, Woodside entered into an Indigenous land use and modern benefits sharing agreement for the Woodside Solar project and is targeting FID readiness in 2023.

"Elsewhere in new energy, Woodside was selected as the preferred partner to progress to the next stage of the proposed Southern Green Hydrogen project in New Zealand, which would produce ammonia from electrolysis using renewable power.

"Woodside's production guidance for full-year 2023 remains 180 million to 190 million barrels of oil equivalent," she said.

Comparative performance at a glance

Operational overview

Production

·      Production increased compared to the previous quarter to a record 51.6 MMboe in Q4 2022, due to:

o  ongoing strong operational performance

o  continued high reliability at Australian operated oil and LNG assets, with Pluto LNG and NWS Project achieving 98.3% reliability for the quarter

o  completion of an approximately seven-week planned turnaround at Atlantis.

This was partly offset by lower production from Bass Strait due to planned offshore maintenance activities and a reduction in demand following the seasonal winter peak.

·      Full-year 2022 production was a record 157.7 MMboe, above upgraded production guidance of 153 - 157 MMboe.

Australian LNG

·      The second phase of Pyxis Hub was successfully completed with ready for start up (RFSU) of Xena-2 achieved on schedule and under budget in November 2022.

·      Woodside and NWS Project participants signed non-binding agreements with Western Gas for processing 2-3 Mtpa of Equus gas from 2027, initially through the Karratha Gas Plant and then later through Pluto LNG. Discussions continue with other resource owners for processing of additional third-party gas.

Gulf of Mexico

·      Drilling of the second development well completed on the Shenzi North project in the Gulf of Mexico and well completion operations commenced. The project was 42% complete at the end of the period.

Australia Oil

·      The Pyrenees Phase 4 infill campaign commenced during the period, with final completion of the campaign expected in Q1 2023. The infill campaign is targeting one workover well and one infill well and is expected to increase recovery from the Crosby and Stickle fields.

·      The Enfield plugging and abandonment (P&A) campaign continued with four wells permanently plugged and one xmas tree removed in the quarter. In 2022, a total of five wells were permanently plugged and 13 xmas trees were removed.

·      The Balnaves P&A campaign consisting of four wells was completed.

Project and development activities

Scarborough

·      The Pluto Train 2 site in Western Australia was handed over to Bechtel and LNG train module construction commenced in Indonesia.

·      Pipeline manufacturing is 59% complete and 92% of tagged equipment has been ordered for the floating production unit (FPU).

·      Engagement with regulators on secondary environmental approvals continued for offshore execution activities, with no impact to critical path.

·      FEED activities for Pluto Train 1 modifications were completed and the project was 25% complete at the end of the period, targeting first LNG cargo in 2026.

Sangomar Field Development Phase 1

·      The subsea installation campaign progressed with rigid pipeline installation now 69% complete.

·      The development drilling program continued with seven of 23 wells completed.

·      The construction phase for the FPSO facility was completed in China. The FPSO facility was successfully relocated to Singapore to complete topsides integration and pre-commissioning.

·      The project was 77% complete at the end of the period and first oil is targeted in late 2023.

Mad Dog Phase 2

·      The operator is working through project commissioning issues and is planning start up in 2023.

Trion

·      Competitive tenders were issued for the drilling rig, subsea equipment, long-lead rotating equipment and installation scopes for subsea, the FPU and the floating storage and offloading vessel.

·      Woodside received confirmation from the National Hydrocarbons Commission (CNH) in December that the "minimum work program" obligation associated with the Trion licence was completed.

Wheatstone

·      Concept selection has been completed for Julimar-Brunello Phase 3. The third phase of the Julimar-Brunello project will involve the tieback of additional production wells to the Wheatstone platform. Woodside is targeting to be FID ready in 2023.

Sunrise

·      The Sunrise Joint Venture and Australian and Timor-Leste Governments held two further Greater Sunrise trilateral meetings for 2022 to progress a new production sharing contract.

·      Subsequent to the quarter, retention lease renewals were granted for Australian titles NT/RL2 and NT/RL4.

New energy

H2OK

·      Completed FEED activities, which have matured the facility design, cost and schedule.

·      Awarded contracts for the engineering and fabrication of electrolysers and liquefaction equipment in support of targeted FID readiness in 2023.

Southern Green Hydrogen (SGH)

·      Woodside was selected as the preferred partner to progress to the next stage of the proposed SGH project in New Zealand. The proposed project will target production of 500,000 tonnes per year of ammonia using electrolysis from renewable power. Subject to finalising commercial arrangements, next steps will involve project participants working towards commencing FEED for the project.

Woodside Solar

·      Woodside entered into a bilateral Indigenous Land Use Agreement and a modern benefits-sharing and relationship agreement with the Ngarluma Aboriginal Corporation (NAC). NAC holds the native title rights on behalf of the Ngarluma people, in respect to the land on which the proposed Woodside Solar project is planned to be developed. Woodside also executed an option to lease this land and has been progressing North West Interconnected System (NWIS) connection and transmission access arrangements.

Marketing

Vessel management

·      Woodside signed binding agreements with Maran Gas Maritime Inc. for the long-term charter of two new-build LNG carriers to be delivered to support the delivery of Scarborough LNG cargoes and growth in trading activities.

PT Pertamina (Persero)

·      Woodside did not exercise its option to supply additional volumes into its long-term sale and purchase agreement with PT Pertamina (Persero), executed in June 2017.

Corporate activities

Hedging

·      As at 31 December 2022, Woodside has placed oil price hedges for approximately 21.8 MMboe of 2023 production at an average price of $74.5 per barrel.

·      Woodside also has a hedging program for Corpus Christi LNG volumes to protect against downside pricing risk. These hedges are Henry Hub and Title Transfer Facility (TTF) commodity swaps. As at 31 December 2022, approximately 49% of Corpus Christi volumes included in stock in transit for 2022, approximately 82% of 2023 volumes and approximately 29% of 2024 volumes have reduced pricing risk as a result of hedging activities.

·      The realised value of hedged positions for the year ended 31 December 2022 is a pre-tax expense of approximately $872 million, with $475 million pre-tax expense related to oil price hedges, $384 million pre-tax expense related to Corpus Christi hedges and $13 million pre-tax expense related to other hedge positions. Hedging losses will be included in "other expenses" in the full-year financial statements.

2022 full-year results and teleconference

·      Woodside's Annual Report 2022, Sustainable Development Report 2022, Climate Report 2022 and associated investor briefing will be released to the market on Monday, 27 February 2023, and will be available on Woodside's website at www.woodside.com.

·      A teleconference providing an overview of the full-year 2022 results and a question and answer session will be hosted by Woodside CEO and Managing Director, Meg O'Neill, and Chief Financial Officer, Graham Tiver, on Monday, 27 February at 10:00 AEDT / 07:00 AWST / 15:00 CST (Sunday, 26 February).

·      We recommend participants pre-register 5 to 10 minutes prior to the event with one of the following links:

o  https://webcast.openbriefing.com/wds-fyr-2023/ to view the presentation and listen to a live stream of the question-and-answer session

o  https://s1.c-conf.com/diamondpass/10028290-3mrhp6.html to participate in the question-and-answer session. Following pre-registration, participants will receive the teleconference details and a unique access passcode.

2022 full-year guidance

·      Woodside will provide 2022 full-year line-item guidance in early February ahead of the 2022 full-year results.

This announcement was approved and authorised for release by Woodside's Disclosure Committee.

Production summary

Product sales

Revenue (US$ million)

Realised prices

·      Average realised price was A$5.3/GJ in Western Australia, A$14.2/GJ in east coast Australia and $7.88/Mcf for International in Q4 2022.

Expenditure (US$ million)

Key project expenditure (US$ million)

Exploration

·      The Hoodoo-1 well was drilled and did not encounter hydrocarbons. Drilling data will inform future activity.

·      Woodside participated in the Chevron-operated Starman-1 well. The well reached total depth in October. Analysis of well results is ongoing.

Exploration or appraisal wells drilled

Permits and licences

Key changes to permit and licence holding during the quarter ended 31 December 2022 are noted below.

Seismic and geophysical survey activity

Production rates

Average daily production rates (100% project) for the quarter ended 31 December 2022:

Forward looking statements and other conversion factors

Disclaimer and important notice

This announcement contains forward-looking statements with respect to Woodside's business and operations, market conditions, results of operations and financial condition which reflect Woodside's views held as at the date of this announcement. Forward-looking statements generally may be identified by the use of forward-looking words such as 'guidance', 'foresee', 'likely', 'potential', 'anticipate', 'believe', 'aim', 'estimate', 'expect', 'intend', 'may', 'target', 'plan', 'forecast', 'project', 'schedule', 'will', 'should', 'seek' and other similar words or expressions. These forward-looking statements include, but are not limited to, statements about Woodside's future plans for projects and the timing thereof, the implementation of Woodside's new energy strategy and Woodside's expectations and guidance with respect to production and certain financial results for 2023. Forward-looking statements are not guarantees of future performance and are subject to inherent known and unknown risks, uncertainties, assumptions and other factors, many of which are beyond the control of Woodside, its related bodies corporate and their respective officers, directors, employees, advisers or representatives. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, drilling and production results; gas commercialisation; development progress; operating results; engineering estimates; environmental risks; physical risks; project delay or advancement; regulatory approvals; fluctuations in commodity prices; the impact of armed conflict and political instability (such as the ongoing conflict in Ukraine) on economic activity and oil and gas supply and demand; the effect of future regulatory or legislative actions on Woodside or the industries in which it operates, including potential changes to tax laws; inflation and government efforts to reduce inflation; increases in interest rates; and fluctuations in currency exchange rates. Details of the key risks relating to Woodside and its business can be found in the "Risk" section of Woodside's most recent Annual Report which was released to the Australian Securities Exchange on 17 February 2022 and in Woodside's filings with the U.S. Securities and Exchange Commission. You should review and have regard to these risks when considering the information contained in this announcement.

Investors are strongly cautioned not to place undue reliance on any forward-looking statements. Actual results or performance may vary materially from those expressed in, or implied by, any forward-looking statements. All information included in this announcement, including any forward-looking statements, speak only as of the date of this announcement and, except as required by law or regulation, Woodside does not undertake to update or revise any information or forward-looking statements contained in this announcement, whether as a result of new information, future events, or otherwise.

All figures are Woodside share for the quarter ending 31 December 2022, unless otherwise stated.

All references to dollars, cents or $ in this presentation are to US currency, unless otherwise stated.

References to "Woodside" may be references to Woodside Energy Group Ltd or its applicable subsidiaries.

The LNG conversion factor from tonne to boe is specific to volumes produced
at each facility and is based on gas composition which may change over time.