This article first appeared on GuruFocus .
-
Production:Total production of 86.5 million barrels of oil equivalent for the half.
-
Free Cash Flow:Achieved a year-on-year increase of more than 150%, with free cash flow of $352 million.
-
EBITDA:Maintained strong EBITDA of $4.6 billion.
-
Underlying Net Profit After Tax:Recorded $1.3 billion.
-
Interim Dividend:Fully franked interim dividend of USD0.57 per share, at the top end of the payout range.
-
Operating Cash Flow:Producing assets delivered $3 billion in operating cash flow during the period.
-
Average Realized Price:Achieved $74 per barrel of oil equivalent.
-
Gearing:20.6% at the end of the half, marginally outside the target 10% to 20% range.
-
Liquidity:$8.2 billion in cash and undrawn facilities.
-
Capital Contributions:Received $1.7 billion from Stonepeak and Williams for Louisiana LNG development.
-
Cost Reduction Target:Announced a structural cost reduction target of USD350 million per year to be delivered from 2028.
-
Sangomar Production:Produced 15 million barrels of oil equivalent Woodside share at 99.5% reliability.
-
Sangomar EBITDA:Generated $3.8 billion of EBITDA for Woodside since startup.
-
Warning! GuruFocus has detected 10 Warning Signs with WOPEF.
-
Is WOPEF fairly valued? Test your thesis with our free DCF calculator.
Release Date: August 25, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Woodside Energy Group Ltd ( WOPEF ) delivered a strong operational and financial performance in H1 2026, with production of 86.5 million barrels of oil equivalent and a year-on-year free cash flow increase of over 150%.
-
The company maintained a resilient EBITDA of $4.6 billion and declared a fully franked interim dividend of USD0.57 per share, at the top end of its payout range, reflecting confidence in its balance sheet.
-
Major growth projects, including Scarborough, Trion, and Louisiana LNG, are progressing on schedule and on budget, with Scarborough on track for first LNG cargo in Q4 2026.
-
Woodside Energy Group Ltd ( WOPEF ) announced a structural cost reduction target of USD350 million per year from 2028, aiming to improve business efficiency and resilience through the cycle.
-
The company is actively managing its portfolio, including the preemption of additional equity in Browse and the divestment of Calypso, to focus on value-accretive opportunities and strengthen long-term cash flow potential.
Negative Points
-
Woodside Energy Group Ltd ( WOPEF ) recorded one high-consequence injury during the half, underscoring ongoing safety challenges despite a strong overall safety record.
-
Production was curtailed by cyclone impacts and the planned Pluto turnaround, limiting the company's ability to capitalize on spot market opportunities during a period of high prices.
-
The company's gearing ratio at 20.6% was marginally outside its target range of 10% to 20%, reflecting new lease liabilities and timing of cash flows, though it expects to return below 20% by year-end.
-
Beaumont New Ammonia production was constrained by third-party feedstock availability, with impacts expected to continue through 2027, and the company has initiated a strategic review of the asset due to changing market conditions.
-
Woodside Energy Group Ltd ( WOPEF ) retired its Scope 3 investment and emissions abatement targets, acknowledging that markets for lower carbon opportunities have developed more slowly than anticipated, which may raise concerns about its long-term sustainability commitments.
Q & A Highlights
Q: Woodside announced it abandoned plans to spend $5 billion on new energy projects by 2030 and is reviewing Beaumont New Ammonia. Will this be a full or partial divestment? Also, are there plans to revisit the structure of Louisiana LNG, given the high equity exposure? A: Elizabeth Westcott (CEO): Beaumont New Ammonia is a high-quality asset now in operations, but it was acquired in a different global environment. We are looking at all options to determine the best value for Woodside, with no determined pathway today. Regarding Louisiana LNG, we have successfully brought in HoldCo partners (Stonepeak and Williams), reducing our capital exposure to 57% ($9.9 billion). There is no planned change to the project structure as we continue to look for additional HoldCo participants.
Q: Can you comment on the target timeline to progress the Browse project towards FID, and provide color on targeted CapEx, including for the CO2 solution? A: Elizabeth Westcott (CEO): Browse is still in pre-FEED. We are working on three streams: EPC contractors providing cost and schedule outlooks, environmental approvals with submissions made to WAEPA and the federal government, and commercial discussions between Browse JV partners and North West Shelf. The pre-emption with INPEX ensures the opportunity to develop Browse through the North West Shelf project, which is highly value-accretive for Woodside shareholders. Timelines and total CapEx will be informed through the ongoing FEED work, so there is nothing further to add at this stage.
Q: You mentioned moving to a single capital allocation framework. What are the new targets from an IRR and payback time perspective? A: Elizabeth Westcott (CEO): We are moving to a single framework to ensure all capital competes equally for investment dollars. The review of capital strategy is holistic, looking at capital management and allocation. We will ensure every dollar is deployed efficiently and will look at how we measure and consider risk, as well as maximizing shareholder returns. Graham Tiver (CFO) added that more information on the capital strategy will be provided at the Capital Markets Day.
Q: Can you elaborate on the scope of the $350 million cost out program and why the opportunity exists now? A: Elizabeth Westcott (CEO): The scope is across Woodside's business, targeting a structured cost out of our base operating business to make us more efficient and resilient through the cycle. Work streams are identifying cost out of operating businesses, corporate parts, and our sustaining portfolio. The savings will commence from 2028, as we want to ensure the efforts are sustained through the business going forward. It will be a combination of operating costs, corporate overheads, and some sustaining CapEx.
Q: Are you confident we could have a sell-down announcement for Louisiana LNG in place by the Capital Markets Day on November 5? A: Elizabeth Westcott (CEO): We remain positive and are happy with how discussions are going on sell-down and FOB offtake at Louisiana. We have strong interest from counterparties and continue to see a number of parties interested. However, we are being patient and disciplined, ensuring we have high-quality partners for this long-term investment. Bringing in Stonepeak and Williams has made a material difference to our capital exposure, giving us time to ensure we have the right partners going forward.
Q: Regarding Sangomar, are you looking at a six to eight well program targeting the S-400 sands, and are you considering backfill or expansion? A: Elizabeth Westcott (CEO): We are looking at a Phase 2 project and continue discussions with Petrosen and the Senegalese government. We see a potential six to eight well program as an opportunity to backfill existing facilities. Graham Tiver (CFO) clarified that the FPSO is 100,000 barrels a day, and this is all about backfill to extend the period of its life, not expanding nameplate capacity.
Q: Can you outline the key capital elements that will bring gearing below 20% in the second half? Does it include the Chevron asset swap? A: Graham Tiver (CFO): There are four elements. First, we are set up for strong second-half production, with no turnaround at Pluto. Second, there is a strong pricing environment. Third, we have the benefits of the Wheatstone North West Shelf swap, which should bring in cash, contingent on a few critical path items. Fourth, 62% of our hedges have cash settled in the first half, so we have a good run in the second half of this strong pricing environment. This gives us confidence that gearing will be back under 20% at December 31, 2026.
Q: Does the capital allocation review extend to things like the long-standing EPS payout ratios and gearing targets, or is it more just around project returns? A: Graham Tiver (CFO): It's all of the above. We are purposely calling it a capital strategy review. It covers our capital allocation framework and our capital management framework. It is comprehensive.
Q: What do you need to see or work through to progress with Sangomar Stage 2? Has anything changed since the Capital Markets Day last year? A: Elizabeth Westcott (CEO): Sangomar continues to be a strong asset, performing exceptionally well with high reliability, though it is in decline. The Phase 2 development is at a stage where we are in discussions with Petrosen and the Senegalese government. These are important discussions as we look to progress further developments. We have technical work to manage alongside discussions with partners and governments before moving forward.
Q: Are you seeing interest pick up in the Louisiana LNG sell-down process, or are we seeing delays given the Middle East situation? A: Elizabeth Westcott (CEO): We see strong interest in Louisiana. A number of parties have needed to focus on securing their short-term supply given the volatile first half of 2026. We have been patient with those parties and continue to see a broad range of interest. Getting more vertically integrated in the gas system is an objective of many companies, and Louisiana provides an opportunity to gain that, whether as an upstream producer or a customer.
Q: Can you give an update on how you contracted for Scarborough ramp-up? Also, does the decision on Scope 3 mean an immediate free up of $3 billion of capital? A: Elizabeth Westcott (CEO): Scarborough is 98% complete, with first LNG cargo expected in Q4 2026. As with
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
