Australia’s Woodside Energy will only progress a merger with compatriot Santos if the deal is value accretive for Woodside’s shareholders, the company’s chief executive Meg O’Neill said on Wednesday.

The company last month confirmed that it was in discussions regarding a potential merger with Santos.

“The talks are still at an early stage and there is no certainty that the transaction will progress. Woodside will be disciplined, conduct thorough due diligence and will only pursue a transaction that is value-accretive for shareholders,” stressed O’Neill.

Woodside has boosted its fourth quarter 2023 revenues to US$3.335 billion, up 3% from the previous three months, due to higher realised prices and on the back of reliable production that contributed to a record annual output of 187.2 million barrels of oil equivalent or 513,000 barrels of oil equivalent per day.

The company’s fourth quarter 2023 production totalled 48.1 million boe (522,000 boepd) with strong reliability of 99.9% maintained at its Pluto liquefied natural gas project (98.2% full year 2023).

“Our expanded global portfolio delivered record production in 2023. Fourth quarter production reflected the completion of planned turnaround and maintenance activities at the North West Shelf and Shenzi. Pluto LNG also maintained its strong production performance, again achieving 99.9% reliability during the period,” said O’Neill.

“As we complete our first full reporting year after the merger with BHP Petroleum, we are pleased with the results of our strong combined portfolio,” she said.

Revenues down year-on-year

However, Woodside’s fourth quarter and full-year 2023 revenues respectively slumped by 35% and 17% year-over-year, in no small part because of the higher commodity prices realised in 2022.

Woodside expects this year’s capital expenditure to be between US$5 billion and US$5.5 billion, assuming no change to current participating interests, compared to US$5.7 billion in 2023, while its full-year 2024 production guidance is in the range of 185 million to 195 million boe (505,000 to 533,000 boepd).

The company is forging ahead with new field developments that will further boost its output.

The Scarborough mega-gas project in Australia in December received secondary environmental approvals for Commonwealth waters and commenced all relevant offshore activities.

The project was 55% complete as of the end of 2023, and subsequently the first production well was spudded and as of 22 January, approximately 57 kilometres out of 433 kilometres of pipelaying has been completed.

“Woodside’s growth projects are being delivered as planned. We have strong momentum on the Scarborough energy project following receipt of regulatory approvals in December for key offshore work scopes. We’ve already completed the seismic survey, nearshore pipelay installation is almost complete and we’ve commenced pipelay work in Commonwealth waters,” said O’Neill.

She added that fabrication of six of the 51 modules for Pluto Train 2 has been completed and work on another 38 is under way.

“We remain on track for targeted first LNG cargo in 2026.”

Woodside on Wednesday noted that its Sangomar field development offshore Senegal was 94% complete as of 31 December, with 17 of 23 wells drilled and completed.

“The Leopold Sedar Senghor floating production storage and offloading facility departed Singapore at the end of December and is scheduled to arrive offshore Senegal in the coming weeks… with first oil targeted for mid-2024,” said O’Neill.

Meanwhile, during the fourth quarter of 2023, the operator continued to award contracts including the wellheads, subsea line pipe and coatings, and the Mexico shore base for its Trion project offshore Mexico; and procurement activities commenced for Trion’s floating production unit materials and subsea equipment.

She added that Woodside is safely executing its significant decommissioning programme of domestic assets and had safely removed the Nganhurra riser turret mooring and had commenced the Stybarrow and Griffin decommissioning campaigns.

The Nganhurra riser turret mooring was successfully removed from its location off the North West Cape in Western Australia and transported to Perth to be cleaned and dismantled in preparation for recycling and reuse.

All 18 Enfield wells have now been plugged and 16 of the 18 christmas trees have been removed. The remaining two trees are expected to be recovered in the first half of 2024, along with the wellhead severance programme.

Woodside last month obtained the environmental approvals to progress in-field Griffin decommissioning activities. Meanwhile, the Endurance drilling rig arrived in Dampier and preparations are under way to commence the Stybarrow well plug and abandonment.

Looking ahead

Woodside’s 2023 full-year results, annual report, and climate transition action plan 2023 are scheduled to be released on 27 February, on which day a teleconference will be hosted by O’Neill and Woodside’s chief financial officer, Graham Tiver.

The company will present its climate transition action plan 2023 to investors on 12 March.