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 (ASX: WDS) delivered strong operational performance in 2024, achieving record production and progressing key projects. However, concerns over a lower-than-expected final dividend have weighed on the stock, leading to a nearly 3% decline in share price on Monday.
The company reported an annual production of 194 million barrels of oil equivalent (MMboe), hitting the upper end of its guidance range. This was largely supported by the successful ramp-up of the Sangomar oil field, which contributed 75,000 barrels per day in the fourth quarter. However, quarterly production of 51.4 MMboe declined by 3% from the previous quarter, impacted by seasonal demand fluctuations and an unplanned outage at Pluto LNG. Revenue for the quarter stood at $3.47 billion, down 6% from Q3 but reflecting a 3% increase year-on-year. Gas sales remained a strong contributor, with 33.6% of LNG sold at hub-linked prices, generating a 31% premium over oil-linked pricing.
Despite robust production figures, investor sentiment has been dampened by expectations of a lower final dividend. The dividend is projected at US 49 cents per share, roughly 20% below market expectations, primarily due to increased costs and higher tax guidance. This unexpected shortfall has overshadowed what was otherwise a solid operational performance, prompting some concerns among shareholders.
Woodside continues to make significant progress on its growth projects. The Scarborough LNG project reached 78% completion and remains on schedule for first LNG in 2026. Meanwhile, the Trion oil project, now 20% complete, is expected to produce first oil by 2028. The company also completed a $1.4 billion sell-down in the Scarborough joint venture to JERA, reinforcing its balance sheet.
With a strong resource base and an estimated gross dividend yield of 11.54%, Woodside remains an attractive holding within the ASX Blue Chip portfolio. While the lower-than-expected dividend is having a negative reaction on the share price today, the ASX Blue Chip portfolio takes a contrarian approach, buying “beaten down” stocks, and WDS’s yield remains one of the highest in the ASX50.
