WDS - Woodside Energy Group

[Dona Ferentes]

Hopefully it’s a bonanza for holders with a lot more to come.
Anything less will be disappointing.

interim dividend of $US1.09 fully franked in its first result since merging with BHP Petroleum. The interim dividend was struck at 80 per cent of underlying net profit (US76¢ a share) and 80 per cent of the merger completion payment adjusted for working capital (US33¢ a share).

Woodside production improved 19 per cent to 54.9 million barrels.

• Net profit for the half was $US1.64 billion from $US317 million, or $US1.82 billion on an underlying net profit basis up from $US354 million.
• Operating revenue more than doubled to $US5.81 billion from $US2.5 billion
• Free cashflow surged to $US2.57 billion.

 

[Rabbithop]

interim dividend of $US1.09 fully franked in its first result since merging with BHP Petroleum. The interim dividend was struck at 80 per cent of underlying net profit (US76¢ a share) and 80 per cent of the merger completion payment adjusted for working capital (US33¢ a share).

Woodside production improved 19 per cent to 54.9 million barrels.

• Net profit for the half was $US1.64 billion from $US317 million, or $US1.82 billion on an underlying net profit basis up from $US354 million.
• Operating revenue more than doubled to $US5.81 billion from $US2.5 billion
• Free cashflow surged to $US2.57 billion.

Good day to you. I read that and was trying to work out how much div in $A.

 

[Dona Ferentes]

Good day to you. I read that and was trying to work out how much div in $A.

I'd reckon about $1.58 per share. Plus or minus

9b. If AUD equivalent not known, date for information to be released : 14/9/2022

Ex Date .... 08/9/2022
Payment Date ... 06/10/2022

 

[Rabbithop]

I'd reckon about $1.58 per share. Plus or minus


Ex Date .... 08/9/2022
Payment Date ... 06/10/2022

Thanks for that. WDS shares was my distribution from BHP. Now these 2 stocks will be kept till I kick the bucket. Have a bank appt this morning. Will be back in the pm for more chat.

 

[finicky]

Looks fabulous but why don't they tell us the results on a per share basis? I can't find any reference in the results briefing presentation. After all, that seems a more like for like comparison after the merger with BHP petroleum and expansion of the share issuance of WDS. Now I'll have to work a number out.

 

[finicky]

I get 1.9 Billion WDS shares Issued (ann 01/06/22)
So EPS for NPAT of $1,640m USD = $0.86 USD
And EPS @ 1.424 exchange rate (at 30 June 2022) = $1.23 AUD
So they are going to pay out a dividend that is higher than statutory earnings for the Half Year?
'Free cashflow' was much higher @ $2,568m USD so maybe that explains it.
I guess its not all that meaningful but if you annualise this June Half result the PE I get is about 15 based on $36 share price - $36 ÷ $2.46.
Just my calcs obviously.

 

[Dona Ferentes]

interim dividend of $US1.09 fully franked in its first result since merging with BHP Petroleum. The interim dividend was struck at 80 per cent of underlying net profit (US76¢ a share) and 80 per cent of the merger completion payment adjusted for working capital (US33¢ a share).

As posted, the dividend is at the top level of 80% of underlying net profit. Clearly there will not be a "BHP cash component" next time.

 

[finicky]

Yes, admit I missed that complexity.
I get $0.96 USD underlying eps. Higher than statutory eps of 0.86 USD.
From presentation:
Underlying NPAT $1.819m
My calc 1.9B shares

 

[CityIndex]

Heavy losses at the open for WDS today after it hit a post-pandemic high, and broke downtrend resistance coming from the 2014 peak on yesterday’s bumper earnings.

It wouldn’t be surprising to see shares pullback on some profit-taking, especially as the RSI was testing overbought levels on the back of yesterday’s move. However, with the acquisition of BHP’s petroleum business only being completed in June, it should provide an even greater boost to earnings in the second half of 2022, if energy prices remain elevated.

All trading carries risk, but it will be interesting to see if this expectation can help WDS extend its gains over the mid-term and potentially target the 2018 highs.

 

[Rabbithop]

Heavy losses at the open for WDS today after it hit a post-pandemic high, and broke downtrend resistance coming from the 2014 peak on yesterday’s bumper earnings.

It wouldn’t be surprising to see shares pullback on some profit-taking, especially as the RSI was testing overbought levels on the back of yesterday’s move. However, with the acquisition of BHP’s petroleum business only being completed in June, it should provide an even greater boost to earnings in the second half of 2022, if energy prices remain elevated.

All trading carries risk, but it will be interesting to see if this expectation can help WDS extend its gains over the mid-term and potentially target the 2018 highs.

It's only a bump or a few bumps on the way..it will come good.

 

[Value Collector]

I get 1.9 Billion WDS shares Issued (ann 01/06/22)
So EPS for NPAT of $1,640m USD = $0.86 USD
And EPS @ 1.424 exchange rate (at 30 June 2022) = $1.23 AUD
So they are going to pay out a dividend that is higher than statutory earnings for the Half Year?
'Free cashflow' was much higher @ $2,568m USD so maybe that explains it.
I guess its not all that meaningful but if you annualise this June Half result the PE I get is about 15 based on $36 share price - $36 ÷ $2.46.
Just my calcs obviously.

I haven’t look closely at the WDS report, but it’s common for companies to pay out dividends higher than their statutory earnings some years, as you correctly pointed out the “free cashflow” covers the dividend, some of the expenses that reduced the statutory earnings are often none cash.

For example depreciation charges reduce earnings, but are not a cash cost in the year they are charged

 

[finicky]

Warren Buffett blazes a trail through the oil field​

 

[peter2]

I've never bothered trading WDS (and STO) due to their correlation to the volatile price of oil and their overnight gaps that make short term trading "fun". I've changed my mind on WDS as the current horrible situation (re gas supply) in Europe unfolds. WDS is very well placed to supply more gas to the EU. These additional sales will improve WDS's ability to establish itself as a true global business.

I'm never going to say that WDS is a great investment however I'm placing WDS in my daily monitoring list. This is a list of my fav trading stocks that I monitor frequently. WDS will be providing "buy the dip" trading opportunities.

Inspiration for this idea comes after reading more about WDS's international relationships in the AFR today.

 

[Garpal Gumnut]

I've never bothered trading WDS (and STO) due to their correlation to the volatile price of oil and their overnight gaps that make short term trading "fun". I've changed my mind on WDS as the current horrible situation (re gas supply) in Europe unfolds. WDS is very well placed to supply more gas to the EU. These additional sales will improve WDS's ability to establish itself as a true global business.

I'm never going to say that WDS is a great investment however I'm placing WDS in my daily monitoring list. This is a list of my fav trading stocks that I monitor frequently. WDS will be providing "buy the dip" trading opportunities.

Inspiration for this idea comes after reading more about WDS's international relationships in the AFR today.

WDS is all over the US mainstream financial media and also among tip sheet and video land.

So expect some interest esp. with a lower AUD.

gg

 

[InsvestoBoy]

WDS is very well placed to supply more gas to the EU.

@Smurf1976 any chance you know how true this is? To be able to supply into the EU you need excess uncontracted gas that can go to a LNG terminal for liquefaction and shipping right? Does WDS have that or is it all locked up on contract already?

 

[divs4ever]

@Smurf1976 any chance you know how true this is? To be able to supply into the EU you need excess uncontracted gas that can go to a LNG terminal for liquefaction and shipping right? Does WDS have that or is it all locked up on contract already?

does the EU have the facilities to accept/use increased supplies of LNG ( i hear stories they don't ) they can use SOME extra but not all they actually need , talk of being nuclear and coal power stations out of mothballs is sweet but last i heard the EU has a power with water levels ( especially on the Rhine ) so reduced cooling for those ( coal and nuclear ) plants

it is more likely WDS will have the opportunity to fill the vacuum created by gas diverted to the EU ( and UK )

where i see lower shipping costs and quicker turnarounds as a bonus ( just not the grand prize )

ANYWAY after the debacle in Europe currently would you really want to throw away reliable customers and feed the EU ( who are liable to hit you with a 'profiteering tax ' to say thanks )

 

[divs4ever]

also the EU was favouring short-term contracts , and that helped greatly in getting them to where they are now

( no one in their right mind would build a pipeline into Europe now )

 

[sptrawler]

Whether it is true or not is a mute point IMO, Woodside is looking to develop new gas reserves, they now have the size to underwrite it.
So with a World that is energy poor, ideology rich and limited options, Woodside becomes attractive IMO.
I'm certainly pleased to have recently bought in at $22 and wont be selling any time soon.
DYOR.

 

[Smurf1976]

@Smurf1976 any chance you know how true this is? To be able to supply into the EU you need excess uncontracted gas that can go to a LNG terminal for liquefaction and shipping right? Does WDS have that or is it all locked up on contract already?

Main thing I'm aware of so far as Woodside is concerned is the Scarborough (gas field) and Pluto Train 2 (LNG plant) project.

To my understanding from the company's publicly released information:

11.1 trillion cubic feet of gas in the field.

Total production to be 8 million tonnes of LNG per annum of which 3 million comes from increased gas supply to the existing Pluto Train 1 and the other 5 million is due to construction of the new Pluto Train 2.

First shipment expected in 2026 but realistically wouldn't be likely to run at full capacity from day one, will take some time to fully commission it.

From media reports like this one: https://www.afr.com/companies/energ...borough-with-new-lng-contract-20210219-p57402

They seem to have already contracted some of that gas to a German buyer.

Regardless of who they've sold it to, given present market circumstances they would presumably have been able to sign someone up at a very good price. This chart, which is generic for LNG and not specific to Woodside, sums up the situation pretty well:

Source of that chart is the ACCC. They're reporting it on a monthly basis hence the "blocky" appearance of the chart. For those unaware - the ACCC data is taken pretty seriously by many who need some objective way to put a price on gas. It's a government agency yes, and one that's focused on economic things not energy resources per se, but they're doing a pretty good job of tracking and reporting the actual market situation for a commodity that's generally somewhat opaque when it comes to pricing.

So Woodside would presumably be able to get a pretty good price no matter who physically buys it.

As for Europe, they're nowhere near being able to import enough LNG to replace lost pipeline supply from Russia. To put that into perspective, even if they took the full 8 million tonnes from Woodside's new project, that still only supplies about 3% of total EU consumption or 7% of EU gas imports from Russia (the most important measure) based on the past few years' data.

Another way to look at that is Russia has been exporting "as gas" via pipelines the equivalent of about 105 million tonnes of LNG to the EU in recent years. Plus the EU has been buying about half of the 29 million tonnes of actual LNG that Russia has been exporting.

So that's 120 million tonnes needed all up for the EU to fully replace the Russian gas which has been supplying ~45% of the EU's total gas consumption. Figures will vary slightly by source - I'm referring to EU data first and foremost, using BP and IEA data to fill any gaps.

A key point to note there is that not all but the majority of the Russian gas has physically come in via pipelines. Gas in a pipeline is just that - gas. Versus LNG at -161 degrees that's delivered on a ship and which needs to be turned back into gas which is then injected into the pipelines. Or in practical terms it's difficult to replace one with the other - they need LNG import terminals to receive the LNG and turn it back to gas, there needs to be ships and so on none of which were required for the Russian gas coming by pipeline.

Russia has also been selling the other half of its LNG production to other buyers. Whether that's continuing is unclear.

So in that context Woodside's new 8 million tonnes in 2026 is a big thing for the company but it's by no means a solution to the overall global situation. A decent help perhaps, 8 million tonnes is a decent sized project, but it won't fix the global situation.

 

[Smurf1976]

Adding to previous comment, in round figures the 120 million tonnes of LNG that the EU would need to replace Russian gas in full is equivalent to about 30% of the entire global LNG market prior to this new demand arising.

That's not likely to be filled quickly by new supply. Just look at an LNG plant and you'll see a maze of pipes and equipment everywhere - they don't get built quickly even if there's gas ready to feed it.