Full-year guidance for output has increased to between 188 million and 195 million barrels, from between 186 million and 196 million barrels, an upgrade calculated by MST Marquee at about 3 per cent. Costs per barrel of oil and gas produced were lowered, as was guidance on capital spending.
Bernstein Research energy analyst Neil Beveridge described the June quarter result as “solid”, while adding that the guidance signals a softer second half. “With commodity prices likely to move sideways over the next six months as OPEC brings back additional capacity into a market which is facing muted demand growth, we expect cash flow generation and earnings in the second half could be sequentially lower,” Beveridge said.
But Jarden analyst Nik Burns said the positive June quarter report could lead to upgrades in consensus forecasts for Woodside’s first-half profit, to be announced on August 19, despite the large restoration expense.
Woodside decided last year to exit the proposed H2OK hydrogen project in Oklahoma and a concentrated solar project in California after finding the projects did not deliver value for shareholders.
The decisions came as the second Trump administration made it clear that emissions reduction had dropped down its list of priorities with a swathe of federal funding cuts for clean energy projects.
In its quarterly update, Woodside cited “ongoing challenges facing the lower-carbon hydrogen industry, including cost escalation and lower-than-anticipated hydrogen demand” as the reason it was exiting H2OK. The decision would result in a $US140 million pre-tax write-down.
Woodside not abandoning clean energy
The company is continuing with its biggest investment in clean energy: the Beaumont low-carbon ammonia project in Texas, which was 95 per cent complete at the end of June. Production of regular ammonia is expected late this year, with the low-carbon version due to follow in 2026.
Work is also continuing on a hydrogen refuelling project in Perth called H2Perth, where hydrogen production is expected in the second half of 2026.
On the hike in costs for decommissioning the Minerva, Stybarrow and Griffin fields in Australia, Woodside said the condition of some sites “continued to present challenges for safe and efficient execution” of the work. That meant the expected cost would be higher than expected at between $US400 million and $US500 million. “Removal of other equipment at the legacy Minerva, Stybarrow and Griffin assets has been impacted by unexpected challenges, with further engineering and alternative solutions required,” Woodside chief executive Meg O’Neill said.
The June quarter included the landmark final investment decision to build the Louisiana LNG export terminal in the US, 40 per cent of which was sold for $U5.7 billion to private investor Stonepeak in June.
Woodside has been in talks with other potential partners to invest in Louisiana LNG, and O’Neill said on Wednesday the company continued to receive “strong interest” from high-quality third parties.
A collaboration agreement signed with Saudi Arabian powerhouse Saudi Aramco in May could result in Aramco buying a stake in the project and purchasing LNG, she added. The Saudi Arabian national oil company may also collaborate with Woodside on the Beaumont ammonia project.
Woodside also reported the permanent shutdown of one of the five LNG production trains at North West Shelf, the country’s biggest export project, which is running out of its own gas supplies. The closure has cut production capacity at the venture to 14.3 million tonnes a year from 16.9 million.
The company received conditional approval from the federal government during the quarter for a 40-year extension of North West Shelf – which will unlock fresh resources from the untapped Browse gas field off the northwest coast of Western Australia – but has yet to agree to the conditions, which have not been made public.
The Scarborough and Pluto expansion project was on track to deliver an initial cargo in the second half of 2026, with construction 86 per cent complete. The large gas project has faced several legal challenges, with a decision on the latest still pending in the Federal Court.
