Woodside Energy Group Ltd (formerly Woodside Petroleum Ltd) is an Australian petroleum exploration and production company. Woodside is the operator of oil and gas production in Australia and also Australia's largest independent dedicated oil and gas company.
Woodside Energy Group (ASX: WDS) delivered a strong third quarter in 2024, achieving record production of 53.1 million barrels of oil equivalent (MMboe), up 20% from Q2 2024.
The surge was primarily driven by the ramp-up of the Sangomar oil field, which reached its nameplate capacity of 100,000 barrels per day, and higher reliability across its LNG assets. Notably, Pluto LNG achieved 99.9% reliability, while North West Shelf (NWS) reached 99.2%, contributing significantly to the overall performance. Output this year is now expected to be between 189 million barrels of oil equivalent and 195 million boe, up from a previous range of 185 million-195 million boe.
Quarterly revenue increased by 21% to USD $3.68 billion, benefiting from increased LNG prices and Sangomar crude sales. A substantial portion (39%) of LNG produced during the quarter was sold at prices linked to gas hub indices, allowing Woodside to capitalise on the higher spot market prices. As a result, the company raised its full-year guidance for gas hub exposure to 33-37% of total LNG output. CEO Meg O’Neill emphasised the importance of this flexible pricing strategy in maximising returns, especially in the volatile LNG market.
In terms of project development, Woodside made notable progress on its major initiatives. The Scarborough Energy Project, a key LNG development in Australia, is now 73% complete, with first LNG cargo expected in 2026. In the United States, the acquisition of OCI’s Clean Ammonia Project in Texas for USD $2.35 billion further enhances Woodside’s portfolio in the energy transition space. The project is expected to begin producing ammonia in 2025, with lower-carbon ammonia slated for 2026, aligning with global demand for cleaner energy sources.
The company also completed the acquisition of Tellurian’s Driftwood LNG development, renaming it Woodside Louisiana LNG. This move further strengthens Woodside’s position in the US LNG market, with a focus on final investment decision (FID) readiness by early 2025. This acquisition adds to Woodside’s diverse portfolio, positioning the company for growth amid the energy transition.
Woodside’s commitment to maintaining its competitive edge in the global LNG market was further underscored by the signing of a 10-year LNG supply agreement with Japan’s JERA, totalling 0.4 million tonnes per annum starting in 2026. Additionally, the company executed 66 petajoules (PJ) of Western Australian gas sales for delivery in 2025 and 2026, reinforcing its role in supplying domestic energy markets.
The company’s capital expenditure for the quarter rose significantly to USD $3.03 billion, reflecting its ongoing investment in key projects. This included USD $1.9 billion for acquisitions, such as the Clean Ammonia Project, as well as continued spending on the Scarborough and Trion developments.
Woodside remains one of the higher quality oil producers listed in Australia and is a regular holding within the ASX Blue Chip portfolio. Investors should remain mindful of the cyclical nature of commodities such as oil and gas, however, from a longer-term perspective there is a strong argument for WDS to be a core holding within investment portfolios. With a dividend yield of 11.3%, WDS is one of the highest yielding large-caps on the ASX, and is therefore unlikely to be removed from the ASX Blue Chip portfolio anytime soon.
