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WOODSIDE ENERGY GROUP LTD

WOODSIDE ENERGY GROUP LTD (WDS.AX) Q1 2026 Earnings Call Transcript

Bullish Oil & Gas Exploration & Production 36.45B Australia
Next Earnings
2026-02-23

Woodside Energy Group Ltd engages in the exploration, evaluation, development, production, marketing, and sale of hydrocarbons in Oceania, Africa, the Americas, Asia, and the Caribbean. The company produces liquefied natural gas, pipeline gas, condensate, natural gas liquids, and crude oil. It holds interests in the Pluto LNG, Northwest Shelf, Wheatstone and Julimar-Brunello, Bass Strait, Pyrenees FPSO, Macedon, Scarborough, Sangomar, Trion, Calypso, Browse, Wildling, Atlantis, Woodside Solar project, Sunrise and Troubadour, and Pluto Train 2 projects, as well as Liard basin. The company was formerly known as Woodside Petroleum Ltd and changed its name to Woodside Energy Group Ltd in May 2022. Woodside Energy Group Ltd was founded in 1954 and is headquartered in Perth, Australia.

Woodside delivered record 2025 production, advanced key growth projects (Scarborough, Louisiana LNG, Beaumont Ammonia), and generated strong free cash flow while maintaining a disciplined capital allocation framework and robust shareholder returns.

⭐ Key Highlights

Record production
Woodside delivered a record annual production of 198.8 mmboe in 2025, exceeding guidance.
Louisiana LNG progress
Final investment decision and partner sell-downs reduced Woodside’s 2025–26 capex exposure; project remains on track with Train 4/5 potential and first LNG targeted for 2029.
Scarborough on track
Scarborough Energy project was 94% complete at year-end with first LNG cargo anticipated in Q4 2026.
Beaumont New Ammonia ramping
Beaumont New Ammonia commenced production in Dec 2025; ramp-up to full capacity expected through 2026 with lower‑carbon ammonia in the second half of 2026.
Strong cash generation and returns
Free cash flow reached $1.9 billion; final dividend of $0.59 per share (total 2025 dividend $1.12 per share) and 80% payout of underlying NPAT.

✔Positive Signals

  • Record annual production of 198.8 mmboe, exceeding guidance
  • Scarborough 94% complete with first LNG cargo targeted for 2026
  • Louisiana LNG project capex now <60% of FID due to sell-downs; stronger partner funding
  • Beaumont New Ammonia started production; ramp-up with demand for conventional and lower‑carbon ammonia
  • Free cash flow of $1.9 billion and final dividend of $0.59 per share (total 2025 dividend $1.12)

✖Negative Signals

  • 2026 is a transition year with Pluto turnaround and sequencing of Scarborough ramp‑up increasing near-term costs
  • PRRT outlook remains uncertain due to volatile pricing and regulatory changes; no quantitative guidance provided
  • Potential delays in selling down Louisiana LNG could affect timing of Trains 4/5 and overall capex pacing
  • Sangomar is entering decline after plateau, introducing more production uncertainty into guidance
  • Beaumont’s Phase 2 depends on customer demand for lower‑carbon ammonia; uptake slower than earlier forecasts

📊Financial Results

  • Underlying NPAT $2.6 billion, supported by record production offsetting weaker 2025 pricing
  • EBITDA margin >70% driven by base business strength, hedging gains, and asset sales
  • Free cash flow $1.9 billion despite higher capital expenditure and softer prices
  • Gearing 18.2% within target range; liquidity $9.3 billion
  • 2025 Brent hedges completed; 18 million barrels hedged for 2026 at ~US$70/bbl

🔮Future Guidance

  • 2026 capex guidance remains $9.9 billion after sell-downs; Pluto turnaround and Scarborough ramp‑up are key cost drivers
  • Trains 4 and 5 at Louisiana LNG require further HoldCo sell-down; decision based on capital allocation discipline and market interest
  • Sangomar production expected to decline from plateau; 2026 liquids guidance is a range with ongoing quarterly updates
  • Beaumont New Ammonia ramp‑up continues; Phase 2 depends on customer demand for lower‑carbon ammonia and CCS availability
  • PRRT trajectory not quantified; guidance will be refined as Scarborough ramp-up and commodity prices evolve

💡Interesting Insights

  • Management emphasized cost transparency and separating feed-gas processing/tolling costs from production costs to improve clarity on 2026 guidance

Detailed Analysis

AI-generated summary of WOODSIDE ENERGY GROUP LTD earnings call transcript.

Woodside capped 2025 with record production driven by Sangomar and portfolio reliability, advancing cash‑generative growth projects including Scarborough and the Louisiana LNG development, while installing strategic partnerships that reduce required capex. The Beaumont New Ammonia ramp-up began, with lower‑carbon ammonia expected in 2026 as CCS and hydrogen infrastructure come online. The Louisiana LNG HoldCo sell‑downs with Stonepeak and Williams reduced Woodside’s capital exposure to $9.9 billion and 57% of total project cost, supporting a strong balance sheet (gearing ~18.2%, liquidity $9.3 billion). The company achieved a 15% reduction in net equity Scope 1 and 2 emissions and maintained industry‑leading reliability, with 2026 guidance highlighting Pluto turnarounds, Scarborough start-up, and continued decommissioning and portfolio optimization. Overall, management remains focused on base‑business performance, cash‑generative growth, disciplined capital management, and sustainability execution.

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