Australia’s Woodside Energy has had a taxing second quarter, posting lower revenues on the back of decreased production, while project milestones and day-to-day operations were overshadowed by last month’s fatal accident offshore Australia.
“It was an extremely difficult period for everyone at Woodside, given the tragic death in early June of a contractor employee at the North Rankin Complex,” chief executive Meg O’Neill said on Wednesday.
“Western Australian Police and the National Offshore Petroleum Safety & Environmental Management Authority (Nopsema) are investigating the incident and Woodside is conducting an internal investigation.”
Woodside posted revenues of US$3.084 billion for the second quarter, down 4% from the fist quarter, mainly due to lower production and lower realised sales prices — the average realised price across its portfolio was US$63 per barrel of oil equivalent versus US$85 per boe in the previous three months and US$95 per boe in the same period last year.
Woodside’s second quarter 2023 production decreased by 5% compared to the previous three months to 44.5 million boe, primarily due to planned major turnarounds on the Pluto LNG project and the Ngujima-Yin floating production, storage and offloading vessel.
The FPSO successfully completed a planned five-yearly maintenance turnaround in a Singapore drydock and is expected this month to resume production from the Vincent oilfield offshore Australia.
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These decreases in output were partly offset by seasonal demand from Bass Strait in Australia and higher production from the Mad Dog development in the US Gulf of Mexico following start-up from the Argos production facility in April, where output is expected to continue to ramp up through 2023.
“Strong underlying operational performance in the second quarter was impacted by planned turnaround and maintenance activities — particularly at the onshore Pluto LNG facility and associated offshore facilities in Western Australia,” confirmed O’Neil.
“Whilst production and sales were lower compared with the first quarter of 2023, they were higher than the corresponding period last year, reflecting Woodside’s expanded operations portfolio.”
Projects progress
During the second quarter of this year, Woodside drilled a successful appraisal well — SWX4 — in the southwest part of the Mad Dog field and an extension of the current development through a multi-well tie-back to Argos is being evaluated.
Also, in the US Gulf, Woodside has completed the second of two wells on its Shenzi North project.
“Subsea work is ongoing with the first of three subsea installation campaigns completed, installing manifolds and high integrity pressure-protection system packages. The project was 82% complete at the end of the period (30 June)”, Woodside said on Wednesday.
The operator is also continuing to make good progress on its Scarborough and Pluto Train 2 project in Australia, which is now 38% complete.
“Fabrication of both the topsides and hull of the floating production unit has ramped up. The accommodation village in Karratha, which will service the Pluto Train 2 construction workforce, is now complete, [and] Pluto Train 2 module fabrication and foundation site works is progressing well,” said O’Neill.
The company’s full-year production guidance remains unchanged at between 180 million and 190 million boe, as does its 2023 capital expenditure that stays in the range of US$6 billion to US$6.5 billion.
Tax liabilities
Woodside’s net profit after tax for the first half of 2023 is expected to include the recognition of a Pluto petroleum resource rent tax (PRRT) deferred tax asset (DTA) expense of approximately US$630 million, due to lower realised pricing in the first half of 2023 and lower forecast short-term pricing.
The company also expects to recognise a DTA of approximately US$320 million for its Trion field offshore Mexico, following the final investment decision in June 2023. The recognition of the deferred tax asset represents the expected future tax benefit due to the expenditure incurred on the Trion project.
“Trion is expected to deliver shareholder returns which exceed Woodside’s capital allocation framework targets following its forecast start-up in 2028,” added O'Neill.
Woodside is scheduled to release its half-year 2023 report and associated briefing on 22 August, and O’Neill and the company’s chief financial officer Graham Tiver will host a teleconference on the same day.
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July 19, 2023 at 12:15PM
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'Extremely difficult period': Woodside Energy CEO reflects on the second quarter - Upstream Online
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