WOODSIDE ENERGY GROUP LTD Thursday, 18 February 2016
ASX: WPL OTC: WOPEY
Woodside Petroleum Ltd.
ACN 004 898 962
Woodside Plaza
240 St Georges Terrace Perth WA 6000 Australia
www.woodside.com.au
On Wednesday 17 February at 7.30am AWST Woodside hosted a 2015 Full-Year Results media teleconference.
The transcript of the briefing is attached.
W: +61 8 9348 5995
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E: michelle.grady@woodside.com.au
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E: investor@woodside.com.au
This document should be read in conjunction with Woodside's 2015 Full-Year Report and associated
presentation pack which is available on the company's website, www.woodside.com.au.
So I'll probably open up and say what a difference a year makes. A year ago we were reporting a record net profit for Woodside and the industry had come through a number of years of growth and significant investment and now we're sitting in a period that we've not seen for some time and it's required companies to substantially challenge their business models and look at what's important for them as they move forward. What I want to do is we set the scene for this morning and we'll get into more of the numbers soon, is start on slide three and really be very clear that our business is in good shape, although of course we're not immune to the external environment that we're in. So life's feeling relative at this point in time.
We are a resilient organisation. We've demonstrated that through the year with a number of the challenges that have been thrown at us and we do have a resilient business model and I'll spend a few moments to explain why. Our low cost of operations continue to generate significant cash to support what is still a very, very strong balance sheet. We've maintained strong levels of liquidity and flexibility during the year through disciplined capital management and we finished the year with $1.7 billion in cash and undrawn facilities. As we've heard over the last couple of years, we've had an unwavering focus on productivity and reliability and its delivered production volumes of 92.2 million barrels of oil equivalent, our second highest production result on record and despite the current environment, we continue to execute our strategy and we're very much delivering on the things that we control.
If you look at slide four, we outlined some of our key achievements for the year. We delivered on our operating and development commitments. We achieved reserves and resources growth and we continued our focus on financial discipline. Along with an excellent production result, our progress towards achieving international top quartile health and safety performance remains on track with a 60% improvement in our
performance since 2012. Our proved plus probable developed and undeveloped reserves increased by 13%, underpinned by the acquisition of Wheatstone and the acquisition of Kitimat LNG and the Pyxis gas discovery increased our 2C contingent resources by approximately 150% from 2014. Of course more recently we've had two exciting discoveries in Myanmar in the recent months.
Our continued financial discipline is reflected in our breakeven cash costs of sales, dropping 33% from 2013 to around $11 per barrel of oil equivalent and we've retained strong liquidity and took advantage of market conditions to raise $4.1 billion last year to bring our pre-tax portfolio cost of debt to a very competitive 2.9% at year end. Finally, we have low levels of capital commitments and our average term to maturity is 4.7 years with negligible debt maturities in 2016 and 2017. So with that as an opener, we'll get to our financial results on page five.
Our reported net profit after tax for 2015 was $26 million, driven substantially by the sharp fall in commodity prices during the year and we'll talk some more in detail about that. Net profit after tax excluding one-off non- cash items was $1.1 billion. We also reported asset impairments, mostly driven by the collapse in near term forward crude oil prices and an approximately 20% reduction in our long term forward price assumptions for the purposes of determining asset values.
This year the Board elected to maintain our 80% dividend payout ratio, providing a full year dividend of $1.09 per share and this will be underwritten by a Dividend Reinvestment Plan which we've reactivated, allowing us to balance returns to our shareholders and maintain a strong balance sheet and retain flexibility.
Cash flow from our operating assets was $2.4 billion and following asset acquisitions, our gearing has increased to 23% consistent with our 10% to 30% target range across the commodities cycle.
Moving to slide six, you can see our safety and environment results remain positive and as I mentioned earlier, our progress towards international top quartile safety performance continues. This is very important as they lead performance indicators for companies, particularly those in the oil and gas industry.
Slide seven gives some performance comparisons over the last five years as we believe our strategy really is delivering value. Over this period we've delivered $7 billion in fully franked dividends to shareholders. Our unit product cost is down 9% and this is despite bringing on a new asset in Pluto in 2012 and of course our maturing oil assets. Production is up 43% and even better, our barrel of oil equivalent for full time equivalent employee ratio is up some 60%, reflecting the increased productivity we have in the organisation. We've also grown our exploration acreage by 95% as we've worked to rebalance and grow our global portfolio.
Looking at slide eight, you can see we had to make some tough choices in 2015 and the resilience of our strategy was demonstrated by our response to a very challenging external environment. We got off to a quick start to the year. We reduced costs, we reduced the size of our organisation. We reorganised ourselves. We reduced our capital spending and our disciplined approach to capital management enabled us to maintain our balance sheet and deliver on our operating and development commitments. We're continuing the proactive approach in 2016 and you'll see on slide nine that our forward business planning is based on $35 per barrel of oil. We've turned on our Dividend Reinvestment Plan to preserve cash and we will maintain a strong balance sheet and we will make prudent decisions to protect our credit rating.
With that, I'll stop. The pack itself is more comprehensive. I think you've probably had time to go through each of the pages on it so I think our time is best spent giving you an opportunity now to ask any questions that you have and I'll answer those to the best of my ability. So with that, I hand over to Q&A.
For me, with respect to the marketing and so forth, those activities did progress but it's fair to say today that we don't have firm sales in hand and the key for us as we go forward and think about this project, particularly given the long term nature of the capital commitments is it really does need to be economically robust across a range of scenarios, not the least of which includes price, cost and schedule, so the things we've all been talking about in the industry over the last few years. So I would say nothing new with respect to the hurdles
Woodside Petroleum Ltd. issued this content on 18 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 February 2016 00:23:11 UTC
Original Document: http://www.woodside.com.au/Investors-Media/announcements/Documents/18.02.2016 2015 Full-Year Results - Media Teleconference.pdf
