Woodside Energy Group Ltd

Thank you for standing by and welcome to the Woodside Energy Group Ltd half year 2026 results. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Liz Westcott, Chief Executive Officer. Please go ahead.

Good morning and welcome to Woodside. for your results presentation. Joining me on today's call is our Chief Financial Officer, Graham Tiver. We are presenting from Sydney and I would like to begin by acknowledging the traditional custodians of this land, the Gadigal people of the Eora Nation and pay my respects to their elders past and present. Now please take time to read the disclaimers, assumptions and other important information on slides two and three. and I'd also like to remind you that all dollar figures in today's presentation are in US dollars unless otherwise indicated. It's a great pleasure to present my first set of results as Woodside CEO. I'm proud of the way we have delivered reliably and consistently through our company leadership transition and during a time of historic volatility on global energy markets. This continues our proven track record as a reliable supplier to customers. Thank you very much. to achieve more than 50% sales growth and approximately $9 billion in net operating cash flow in 2032. My focus as CEO is on the disciplined delivery of this pathway while raising the bar further to translate future growth into greater value for our shareholders. There are some key areas where Woodside can build from our strengths to lift performance, sharpen our focus on value, and improve the resilience of our business through the cycle. These include active management of our portfolio to maximise returns on capital with all investment opportunities competing under a single framework for shareholder value. Our investment choices in new energy must be underpinned by customer demand and market commerciality. We must also achieve structural cost savings across our business driven by an ambitious and transparent cost-out target We are announcing today a structural cost reduction target of US$350 million per year to be delivered from 2028. Later in the presentation, I will provide more detail on how we will sharpen our focus on value. But first, to our half-year results, which reflect Woodside's impressive operational and financial performance to date in 2026. These results demonstrate how we are de-risking our business today and driving long-term shareholder value. As shown on slide 6, reliable operations underpin strong production and cash flow across our global portfolio. We achieved total production of 86.5 million barrels of oil equivalent for the half. Free cash flow achieved a year-on-year increase of more than 150% and we maintained strong EBITDA of $4.6 billion. Regrettably, we experienced one high consequence injury during the period. We made significant progress on our next phase of value, advancing major projects at Scarborough, Treon and Louisiana LNG on schedule and on budget. We recorded an underlying net profit after tax of $1.3 billion, and based on this, the Board has determined a fully franked interim dividend of 57 US cents per share, once again at the top end of our payout range. Slide 7 highlights Woodside's world-class delivery during the half, underpinned by reliable operations and disciplined investment in growth. At Pluto, we safely executed a major planned turnaround on schedule and within budget, which included works to prepare for Scarborough. Our unit production costs remained competitive, notwithstanding this significant turnaround activity. We continued to efficiently execute our major projects with a strong focus on cost management remaining on schedule and budget. We also continue to strengthen the quality of our global portfolio, sharpening our focus on opportunities that play to Woodside's strengths and offer value accretive growth. During the period, we exercised our preemption right, which will result in increased equity in browse on completion. Woodside's combined interest in the browse resource and the Northwest Shelf onshore infrastructure provides the basis for an integrated development concept with long-term cash flow potential. Subsequent to the half, in July we assumed operatorship of the Gippsland Basin assets, supporting the continued reliable supply of gas to the Australian domestic market. And in August, we agreed to divest our interest in the Calypso project in Trinidad and Tobago, demonstrating our prudent approach to portfolio management and capital allocation. Keeping our people safe remains our highest priority at Woodside, and we continue striving for sustained improvement in our safety performance. During the half we completed more than 11 million work hours including construction, commissioning and complex turnarounds at our global operating and project sites. As shown on slide 8 we recorded one high consequence injury and zero tier 1 or tier 2 process safety events. One high consequence injury is one too many. and we remain firmly focused on continuous improvement and management of risk across our operations. This includes proactively managing risk and leveraging field leadership programs to provide deeper insights to our performance. Turning now to our operational performance on slide nine. The first half once again showcased Woodside's operational excellence and proven ability to maximise value from our producing assets. which delivered $3 billion in operating cash flow during the period. We are making good progress on decommissioning across the portfolio. We commenced plug and abandonment on eight subsea wells at the Northwest Shelf and Julamar Brunello and removed around 26 kilometres of flowlines and umbilicals at Stuyborough and Griffin. At our Australian operations, we are executing infill opportunities across Pluto, Julamar Phase 3 and Turrum Phase 3 supporting continued value creation from our existing infrastructure and assets. Woodside is assessing the opportunity in our Gippsland Basin assets to unlock up to 200 petajoules of potential Bass Strait gas supporting domestic energy security and creating additional value from the portfolio. Technical maturity and final details of the Australian Government's proposed domestic gas reservation scheme will influence whether we progress this opportunity to a final investment decision. Our international portfolio performed very well over the half, led by exceptional ongoing performance at Sangamah, which produced 15 million barrels of oil equivalent Woodside share at 99.5% reliability. The asset has now generated $3.8 billion of EBITDA for Woodside since start-up. We are continuing our discussions with Petrosen and the Government of Senegal on a potential additional phase, which we estimate could be a 6-8 world program. At Beaumont New Ammonia, we assumed operational control in March and are delivering cargos to domestic and international markets. During the half, production was constrained by third-party feedstock availability, with impacts expected to continue through 2027. Moving to delivery of our major projects on slide 10. We continue to make excellent progress on the Scarborough Energy Project, which was 98% complete at the end of the half. and remains on track for first LNG cargo in the fourth quarter of 2026. Subsequent to the period, the floating production unit achieved ready for start-up status and first gas, marking another significant milestone as we move closer to production. Onshore, we continued construction and commissioning at Pluto Train 2. Mechanical runs have been completed on three of the six liquefaction compressors, with the remaining activities progressing as planned. Our focus is now on disciplined execution through to start up. We are progressively bringing wells online, pressurising the trunk line and introducing gas into the onshore facilities while testing and verifying each part of the system. We are taking the time to ensure we bring these facilities online safely and reliably as we move towards first LNG cargo and a significant new source of cash generative production to our portfolio. Moving to our Trion project on slide 11, which was 64% complete at the end of the half and targeting first oil in 2028. During the half we achieved key construction and drilling milestones. Engineering of the floating storage and offloading facility is progressing to plan with fabrication underway and major equipment ordered. Preparations are now well advanced for the subsea installation campaign with equipment set to be delivered ahead of offshore installation commencing in the third quarter of 2026. Turning to slide 12, Louisiana LNG continues to progress on schedule and budget and was 28% complete at the end of the half. We achieved several key construction milestones including commencement of berth dredging, installing the first mechanical equipment in train 1, which was 35% complete at the end of the half, and erecting the first structural steel in train 2. We are also advancing feed gas procurement in line with our gas supply strategy. Williams, our partner and pipeline operator, is progressing execution of line 200. We continue to see strong interest from potential counterparties across both sell-downs and LNG off-take and our approach remains focused on the quality partnerships required for this long-term investment. Strong sustainability performance remains fundamental to the long-term success of our business and we made good progress in key areas during the half. Having achieved our 2025 Net Equity Scope 1 and 2 greenhouse gas emissions reduction target, we remain on track to meet our 2030 target of a 30% reduction against our baseline. We submitted our second annual Oil and Gas Methane Partnership 2.0 implementation plan, including enhanced methane emissions reporting at our Sangamah and North West Shelf operations. During the half we continued making significant economic and social contributions to the communities where we operate. We paid more than 1 billion Australian dollars in taxes, royalties and levies to Australian governments during the half and committed to more than 520 million Australian dollars of spend with almost 300 local businesses during our Pluto Train 1 modifications program. Subsequent to the period we launched our inaugural climate Global Indigenous Peoples Strategy, setting out our intent to strengthen partnerships and support positive outcomes for Indigenous peoples across the regions where we operate. We also took forward biodiversity initiatives in the United States and Australia. In Louisiana, we committed $5 million over six years to the Sam Houston Jones State Park Restoration Project, while in Western Australia we continued to progress the Wathauru Biodiversity Project. Moving to slide 14, Woodside has continued to deliver during a period of significant volatility in global energy markets. The temporary withdrawal of 20% of LNG supply and 13% of oil supply from global markets as a result of the Middle East conflict drove increased customer demand for Woodside's products. Brent and JKM Pricing have both moderated from initial price spikes in March and April. However, restricted supply and price volatility are expected to continue for some time. We achieved an average realised price of $74 per barrel of oil equivalent through our contracted positions and premiums achieved on crude products. Cyclone related production impacts and planned Pluto turnaround curtailed available woodside volumes during the period, which limited our exposure to the spot market. Our marketing and trading division continued to optimise the portfolio across multiple trades to manage risk and maximise value while fulfilling customer commitments. Some of these trades were across the reporting period. We see tailwinds for the second half from this trading as well as pricing lags on our oil-linked LNG contracted volumes. Ongoing gas hub exposure combined with our established customer relationships and growing shipping fleet position us well to derive additional value moving forward. With about 75% of our LNG volumes contracted through to 2028, we will remain a reliable provider to existing customers who value security of supply. Long-term structural demand outlook for LNG as a reliable, flexible and versatile energy source remains, notwithstanding the impact of recent supply shortages on demand from some price-sensitive markets. Wood Mackenzie continues to forecast ongoing robust demand growth in Asia through to the 2040s as these economies seek LNG to support baseload power, industrial use and grid stability. Wood Mackenzie has also revised upwards its long-term European gas demand forecast in each of the past four years. This indicates how advanced economies with net zero targets continue to see an important role for natural gas, including LNG, to complement renewables and support energy security. Woodside's portfolio, featuring highly reliable assets with diversified points of supply, underpinned by long-term customer relationships in major energy markets, is well placed to meet this demand. I'll now hand over to Graham to take you through our financial highlights before outlining how we're positioning Woodside for the next phase.

Thanks Liz and hello everyone. I'm pleased to present another impressive set of financial results today, achieved during a turbulent period for global energy markets. Our performance over the first half was characterised by strong cash generation and proactive debt management, positioning us well to capture the benefits of production and pricing upside in the second half of 2026. During an expected period of high expenditure due to project execution and planned turnarounds, we took early action at the start of the year to actively manage our balance sheet to protect downside price risk. This involved starting the year with strong liquidity and our routine hedging program. We maintained our investment grade credit rating. and retained significant exposure to the upside and we are anticipating strong cash generation in the second half. Slide 18 shows the underlying financial strength of our business. During a period of high prices, we were able to generate additional revenue whilst continuing to execute planned turnarounds and manage adverse weather outcomes which reduced available production volumes. Our reliable and cost-competitive based business has driven the positive trend you can see across the financial indicators. This includes growth in operating revenue, net profit after tax and return on equity and a resilient EBITDA of approximately $4.6 billion. While we achieved higher revenue due to elevated commodity prices, year-on-year EBITDA performance reflects increased operating costs on the commencement of Beaumont New Ammonia Pluto turnaround costs and timing of trading margins. Our healthy balance sheet with free cash flow of $352 million and liquidity of $8.2 billion keeps us well positioned to navigate volatility in global energy markets while continuing to fund near-term growth and return value to our shareholders. Our current capital management framework has served us well, providing clear guardrails to support financial discipline and deliver enduring shareholder returns. However, as Liz mentioned earlier, we will review and test the framework against our evolving business to ensure a disciplined capital strategy. We continue to exercise strong cost control across our business, but we are not standing still and will always look for opportunities to improve. Gearing at the end of the year was 20.6%, reflecting new lease liabilities, net hedge cash settlements and trade receivables not converted into cash at 30 June 26. This is marginally outside our target 10-20% range, but as we have previously noted, our capital management framework provides flexibility to sit temporarily outside of this range during capital-intensive periods. Our approach is anchored by an investment grade credit rating and an established dividend policy with a targeted 50-80% payout range. Slide 20 provides further detail on our balance sheet strength with $8.2 billion in cash and undrawn facilities at the end of the half. As you can see, we've maintained strong liquidity throughout the past five years across changing market conditions and expenditure on major growth projects. In the current environment, our strong balance sheet provides an important buffer against global supply chain disruptions, inflationary pressures and price volatility. Cash generating capacity of our assets, active management of our debt portfolio and sell downs last year of our Louisiana LNG project have all contributed to our position. $1.7 billion in capital contributions was received during the half from Stonepeak and Williams for development of Louisiana LNG. We're particularly pleased that our strong performance over the half has translated into immediate rewards for our shareholders. The fully franked interim dividend of 57 US cents per share is once again at the top end of our targeted payout range, demonstrating our confidence in the strength of the balance sheet to return cash to shareholders while investing in long-term value accretive growth. We have now returned approximately US$12 billion to our shareholders since the completion of our merger with BHP's petroleum business in 2022. Our focus on financial discipline and strong capital management will continue to underpin Woodside's long-term profitability and continued delivery of returns to our shareholders. Thank you and I'll now hand back to Liz.