Woodside beats revenue forecasts despite hydrogen project exit
Australia's Woodside Energy reported stronger-than-expected second-quarter results on Wednesday, with revenue rising 8% to $3.28 billion, driven by robust performance from its Sangomar oil project in Senegal. However, the energy giant also announced its exit from a hydrogen venture amid mounting costs.
The Perth-based company's quarterly production jumped 13% to 50.1 million barrels of oil equivalent, significantly exceeding analyst expectations. The Sangomar project, which marked its first anniversary of operations in June, contributed $510 million in revenue during the quarter.
"We delivered strong production of 50 million barrels of oil equivalent for the quarter from our diverse portfolio of high-quality assets," said CEO Meg O'Neill. "At the same time, ongoing focus on cost control has enabled us to lower our unit production cost guidance for 2025."
The company reduced its annual unit production costs to $8-$8.50 per barrel of oil equivalent, down from the previous range of $8.50-$9. Shares rose as much as 2.4% to a one-month high following the announcement.
Despite the positive operational results, Woodside faced significant writedowns. The company confirmed it was abandoning its H2OK hydrogen project in Oklahoma, citing cost escalation and weaker demand in the low-carbon hydrogen sector. This decision will result in a $140 million pre-tax impairment loss.
"We have made the decision to exit the H2OK Project, demonstrating our disciplined approach to portfolio management," the company stated.
Woodside also expects to book $400-500 million in pre-tax charges related to decommissioning work at its ageing Minerva, Stybarrow and Griffin offshore facilities, where technical challenges have driven up expenses.
The company completed the sale of a 40% stake in its Louisiana LNG project to Stonepeak for $5.7 billion in June. The buyer has agreed to fund 75% of the project's capital expenditures in 2025 and 2026, reducing Woodside's financial exposure.
Woodside maintained its full-year production guidance of 188-195 million barrels of oil equivalent.
