Woodside Energy's Annual Profit Drops Amid Weak Oil and Gas Prices

Woodside Energy Group Ltd, a global energy company, has reported its smallest annual profit in three years, with underlying net profit after tax falling to $2.88 billion in 2024. The company's average realised price for its products dropped 7% to $63.60 per barrel of oil equivalent, contributing to the decline in profits. Despite the challenging market conditions, Woodside maintained its 2025 production forecast, citing robust LNG demand in the Asia Pacific region.



The company's Australia segment, engaged in the exploration, evaluation, development, production, and sale of liquified natural gas, pipeline gas, crude oil, and natural gas liquids in Australia, was particularly affected by the weak oil and gas prices. However, Woodside's international and marketing segments also faced headwinds due to the global energy market dynamics.



Woodside Energy's strategic focus on LNG and low carbon energy projects has positioned the company to navigate the current energy market dynamics and long-term energy transition. The company's growth strategy assumes a gradual transition, with LNG playing a central role in bridging the gap to a net zero future. A US$5 billion investment budget for new energy by 2030 will kick start the pivot to low carbon and begin to address Scope 3 risk.

The company's major growth projects, such as Scarborough, Trion, and Louisiana LNG, are expected to generate significant value for Woodside in the long run. However, these projects require significant capital investment, and Woodside's dividend policy allows the company to balance the needs of its shareholders with the requirement to fund these strategic initiatives.

Woodside Energy's dividend policy balances shareholder returns with the need for reinvestment in growth projects by maintaining a consistent payout while allocating capital to strategic projects. The company has an 80% dividend policy, which means it aims to distribute 80% of its underlying net profit after tax as dividends to shareholders. This policy ensures that shareholders receive a significant portion of the company's earnings while allowing Woodside to retain the remaining 20% for reinvestment in growth projects and maintaining a strong balance sheet.

In conclusion, Woodside Energy's annual profit has dropped amid weak oil and gas prices, but the company's strategic focus on LNG and low carbon energy projects, along with its balanced dividend policy, positions it well to navigate the current energy market dynamics and long-term energy transition. As the company continues to invest in growth projects and maintain a strong financial position, it is well-positioned to capitalize on opportunities in the global energy market.