Woodside Energy: will the company reach its three-year high?

[MongiIG]

Woodside Energy reported a 414% increase in underlying NPAT and the largest interim dividend since 2014 on Tuesday, 30 August.

Source: Bloomberg

 

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Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 30 August 2022 

Woodside Energy half-year 2022 key results

• 414% increase in underlying NPAT
• 688% soar in free cash flow to $2.57B
• 116% increase in realised price at $96.4 per boe
• 47% jump in unit production cost to $7.2 per boe
• Maintained cash margin above 80%

Other key financial metrics

Source: Woodside Energy

Woodside Energy report key highlights

• Substantially increased realised prices

Thanks to skyrocketing oil and gas prices, Woodside Energy has disclosed an average realised price of $96.4 per boe, a mouthwatering 116% increase from last year. This helped the company to generate quarterly revenue of $3.4 billion, an increase of 44% compared to the first quarter of 2022.

Source: Woodside Energy

• Contribution from the BHPP assets

Woodside Energy accomplished its highly anticipated merger with BHP Petroleum (BHPP) on June 1st, 2022.

As a result, the newly released report offered a glimpse of BHPP's contribution to the comapny's portfolio while Woodside Energy stated it looked forward to achieving more cost and value synergy with its partner.

In terms of production cost optimization, the upgraded group has planned a major shutdown at Wheatstone Project and a maintenance phase across their portfolio. The commencement of the interconnector will help generate revenue of $419 million (seven percent the group's revenue) and increase the realised price by $5/boe for Q2.

Moreover, Woodside Energy expects the return to pay back the capital investment within the first three months of operation.

• Largest interim dividend since 2014

The best news for Woodside Energy’s shareholders is undoubtedly the dividend payout.
The company decided to pay an interim 2022 fully franked dividend of US $1.09 per share, up from US 30 cents a year ago. As a result, the total payout value is up to $2.1 billion, representing 80% of Woodside’s underlying net profit after tax for H1 2022 and the top level of the oil and gas producer’s payout range.

Woodside shares are trading on a trailing 12-month dividend yield of 8.4%.

Source: Woodside Energy

Woodside Energy share price and technical analysis

The Woodside Energy share price is on fire this year.

While the broader ASX 200 retreats due to concerns of soaring inflation and rising interest rates, Woodside shares have jumped up 62% on the back of booming oil prices from earlier this year. The price was recently trading around the two-year high level.

According to the weekly chart below, the price appears to consolidate around $35, a level last seen in January 2020. Overall, the bull sentiment remains clear and solid as the current price flys above the 20-, 50- and 100-day moving averages and targets the three-year-high level at $37.5.

For the near term, we also can't rule out the possibility that the current oversold condition may move the price back to the supporting trend line and take a short-term breather.

Source: IG