Woodside Energy Group Ltd
ACN 004 898 962
Mia Yellagonga
11 Mount Street
Perth WA 6000
Australia
T +61 8 9348 4000
www.woodside.com
ASX: WDS
NYSE: WDS
LSE: WDS
Announcement
Tuesday, 26 March 2024
WOODSIDE COMPLETES SALE OF 10% SCARBOROUGH
INTEREST
Woodside has completed the sale of a 10%
non-operating participating interest in the Scarborough Joint
Venture to LJ Scarborough Pty Ltd (LNG Japan).[1]
The completion follows Woodside's announcement
on 8 August 2023 that it had established a strategic relationship
with LNG Japan that involved three elements: equity in the
Scarborough Joint Venture; potential LNG offtake; and collaboration
on potential opportunities in new energy. The sale proceeds
received by Woodside of US$910 million for equity in the
Scarborough Joint Venture comprises the purchase price, reimbursed
expenditure and escalation.[2]
Woodside CEO Meg O'Neill welcomed completion of
the sale.
"LNG Japan's commitment to the Scarborough
Joint Venture is a demonstration of the value our customers place
on gas as a long-term source of energy as they navigate the energy
transition. Completion of the sale to LNG Japan is a significant
milestone as we progress toward first LNG cargo from Scarborough
targeted in 2026.
"We are also pleased to welcome Japan
Organization for Metals and Energy Security's equity investment in
LJ Scarborough Pty Ltd. JOGMEC's support reflects the contribution
Scarborough gas will make to Japan's energy security."
Woodside holds a 90% interest in the
Scarborough Joint Venture and will remain as operator. Following
completion of the transaction with JERA announced on 23 February
2024, Woodside's interest will be 74.9% in the Scarborough Joint
Venture.[3]
As a result of completion of the sale, applying
estimates effective as at 26 March 2024, Woodside's Scarborough
field proved (1P) undeveloped reserves reduced by 128.7 MMboe to
1,158.3 MMboe (Woodside share).[4] Proved
plus probable (2P) undeveloped reserves reduced by 201.1 MMboe to
1,809.7 MMboe (Woodside share).[5]
Woodside's Scarborough field Best Estimate (2C) contingent
resources reduced by 2.2 MMboe to 20.2 MMboe (Woodside
share).[6],[7]
The attached notes on petroleum reserves and
resource estimates form part of this announcement.
About
Scarborough
The Scarborough Energy Project comprises the
Scarborough Joint Venture, the Pluto Train 2 Joint Venture and
modifications to Pluto Train 1 to process Scarborough gas. The
Scarborough Joint Venture includes the Scarborough field and
associated offshore and subsea infrastructure.
The Scarborough field is located approximately
375 km off the coast of Western Australia and the reservoir
contains less than 0.1% carbon dioxide. Scarborough gas will be
processed at the Pluto LNG facility, where Woodside is currently
constructing Pluto Train 2. Woodside is operator of Pluto LNG and
Pluto Train 2.
In addition to the sale of a 10% non-operating
participating interest in the Scarborough Joint Venture to LNG
Japan, Woodside announced in February 2024 it had entered into a
sale and purchase agreement with JERA for the sale of a 15.1%
non-operating participating interest in the Scarborough Joint
Venture.3
About LNG
Japan
LJ Scarborough
Pty Ltd is a jointly owned subsidiary of LNG
Japan Corporation (which is a 50:50 joint venture between Sumitomo
Corporation and Sojitz Corporation) and Japan Organization for
Metals and Energy Security (JOGMEC). JOGMEC has a 49.9% interest in
LJ Scarborough Pty Ltd.
Sumitomo
Corporation is a leading Fortune 500 global
trading and business investment company with 129 locations
(Japan:20, Overseas:109) in 66 countries and regions.
Sojitz
Corporation consists of approximately 400
subsidiaries and affiliates located in Japan and throughout the
world, developing wide-ranging general trading company operations
in a multitude of countries and regions.
About JOGMEC
Japan Organization for Metals and Energy
Security (JOGMEC) integrates the functions of the former Japan
National Oil Corporation, which was in charge of securing a stable
supply of oil and natural gas, and the former Metal Mining Agency
of Japan, which was in charge of ensuring a stable supply of
nonferrous metal and mineral resources and implementing mine
pollution control measures.
Contacts:
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INVESTORS
Marcela Louzada
M: +61 456 994 243
E: investor@woodside.com
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MEDIA
Christine Forster
M: +61 484 112 469
E:
christine.forster@woodside.com
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This announcement was approved and authorised for release by
Woodside's Disclosure Committee.
Forward-looking
statements
This announcement contains forward-looking
statements with respect to Woodside's business and operations,
market conditions, results of operations and financial condition,
including, for example, but not limited to, statements regarding
the transaction, the timing of completion of other transactions,
the timing of completion of Woodside's projects and expectations
regarding future expenditures and future results of projects. All
statements, other than statements of historical or present facts,
are forward-looking statements and generally may be identified by
the use of forward-looking words such as 'guidance', 'foresee',
'likely', 'potential', 'anticipate', 'believe', 'aim', 'aspire',
'estimate', 'expect', 'intend', 'may', 'target', 'plan',
'forecast', 'outlook', 'project', 'schedule', 'will', 'should',
'seek' and other similar words or expressions. Similarly,
statements that describe the objectives, plans, goals or
expectations of Woodside are forward-looking statements.
Forward-looking statements in this announcement
are not guidance, forecasts, guarantees or predictions of future
events or performance, but are in the nature of future
expectations that are based on management's current expectations
and assumptions. Those statements and any assumptions on
which they are based are subject to change without notice and are
subject to inherent known and unknown risks, uncertainties,
assumptions and other factors, many of which are beyond the control
of Woodside, its related bodies corporate and their respective
officers, directors, employees, advisers or representatives. If any
of the assumptions on which a forward-looking statement is based
were to change or be found to be incorrect, this would likely cause
outcomes to differ from the statements made in this
announcement.
A detailed summary of the key risks relating to
Woodside and its business can be found in the "Risk" section of
Woodside's most recent Annual Report released to the Australian
Securities Exchange and the London Stock Exchange and in Woodside's
most recent Annual Report on Form 20-F filed with the United States
Securities and Exchange Commission and available on the Woodside
website at
https://www.woodside.com/investors/reports-investor-briefings. You
should review and have regard to these risks when considering the
information contained in this announcement.
All information included in this announcement,
including any forward-looking statements, reflects
Woodside's views held as at the date of this announcement
and, except as required by law or regulation, neither
Woodside, its related bodies corporate, nor any of
their respective officers, directors, employees, advisers or
representatives intends to, undertakes to, or assumes any
obligation to, provide any additional information or update or
revise any information or forward-looking statements in this
announcement after the date of this announcement, either to make
them conform to actual results or as a result of new information,
future events, changes in Woodside's expectations or
otherwise.
Investors are strongly cautioned not to place
undue reliance on any forward-looking statements. Actual results or
performance may vary materially from those expressed in, or implied
by, any forward-looking statements.
Notes to
petroleum reserves and resources
1. Unless otherwise
stated, all petroleum resource estimates are quoted as at the
effective date of
26 March 2024, net Woodside share.
2. All numbers are
internal estimates produced by Woodside. Estimates of reserves and
contingent resources should be regarded only as estimates that may
change over time as additional information becomes
available.
3. As a result of the
completion of the sale, Woodside's interest in Scarborough will
reduce to 90%. This results in a change in reserves and contingent
resources estimates (Woodside net equity share). There are no other
changes to the underlying reserves and contingent resources
estimates for the Scarborough field.
4. The reference point is defined as the
outlet of the downstream (onshore) gas processing
facility.
5. 'Reserves' are estimated quantities of petroleum that have
been demonstrated to be producible from known accumulations in
which the company has a material interest from a given date
forward, at commercial rates, under presently anticipated
production methods, operating conditions, prices, and costs.
Woodside reports reserves inclusive of all fuel consumed in
operations. Woodside estimates and reports its proved reserves in
accordance with SEC regulations which are also compliant with the
2018 Society of Petroleum Engineers (SPE)/World Petroleum Council
(WPC)/American Association of Petroleum Geologists (AAPG)/Society
of Petroleum Evaluation Engineers (SPEE) Petroleum Resources
Management System (PRMS) (SPE-PRMS) guidelines. SEC-compliant
proved reserves estimates use a more restrictive, rules-based
approach and are generally lower than estimates prepared solely in
accordance with SPE-PRMS guidelines due to, among other things, the
requirement to use commodity prices based on the average of first
of month prices during the 12-month period in the reporting
company's fiscal year. Woodside estimates and reports its proved
plus probable reserves in accordance with SPE-PRMS guidelines which
are not compliant with SEC regulations.
6. Assessment of the economic value in support of an SPE-PRMS
(2018) reserves and resources classification, uses Woodside
Portfolio Economic Assumptions (Woodside PEAs). The Woodside PEAs
are reviewed on an annual basis, or more often if required. The
review is based on historical data and forecast estimates for
economic variables such as product prices and exchange rates. The
Woodside PEAs are approved by the Woodside Board. Specific
contractual arrangements for individual projects are also taken
into account.
7. Woodside uses both deterministic and probabilistic methods for
the estimation of reserves and contingent resources at the field
and project levels. All proved reserves estimates have been
estimated using deterministic methods and reported on a net
interest basis in accordance with the SEC regulations and have been
determined in accordance with SEC Rule 4-10(a) of Regulation
S-X.
8. 'Contingent resources' are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations, but the applied project(s) are not yet
considered mature enough for commercial development due to one or
more contingencies. Contingent resources are estimated and reported
in accordance with SPE-PRMS guidelines and may include, for
example, projects for which there are currently no viable markets,
or where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality. Woodside reports
contingent resources inclusive of all fuel consumed in operations.
Contingent resources are different from, and should not be
construed as, reserves. Contingent resources estimates may not
always mature to reserves and do not necessarily represent future
reserves bookings. Contingent resources volumes are reported at the
'Best Estimate' (P50) confidence level. 2C contingent resources are
not compliant with SEC regulations. The SEC prohibits disclosure of
oil and gas resources, including contingent resources, in SEC
filings. However, Australian securities regulatory authorities
allow disclosure of oil and gas resources, including contingent
resources.
9. 'MMboe' means millions (106) of barrels of oil
equivalent. Natural gas volumes are converted to oil equivalent
volumes via a constant conversion factor, which for Woodside is 5.7
Bcf of dry gas per 1 MMboe. All volumes are
reported at standard oilfield conditions of
14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 degrees
Celsius).
10. 'Proved reserves' are those quantities of crude oil,
condensate, natural gas and NGLs that, by analysis of geoscience
and engineering data, can be estimated with reasonable certainty to
be economically producible from a given date forward from known
reservoirs and under existing economic conditions, operating
methods, operating contracts, and government regulations. Proved
reserves are estimated and reported on a net interest basis in
accordance with the SEC regulations and have been determined in
accordance with SEC Rule 4-10(a) of Regulation
S-X.
11. 'Undeveloped reserves' are those reserves for which wells and
facilities have not been installed or executed but are expected to
be recovered through future significant
investments.
12. 'Probable reserves' are those reserves which analysis of
geological and engineering data suggests are more likely than not
to be recoverable. Proved plus probable reserves represent the best
estimate of recoverable quantities. Where probabilistic methods are
used, there is at least a 50% probability that the actual
quantities recovered will equal or exceed the sum of estimated
proved plus probable reserves. Proved plus probable reserves are
estimated and reported in accordance with SPE-PRMS guidelines and
are not compliant with SEC regulations.
13. The estimates of petroleum
reserves and contingent resources are based on and fairly represent
information and supporting documentation prepared by, or under the
supervision of
Mr Ben Stephens, Woodside's Vice President Reserves and Subsurface,
who is a full-time employee of the company and a member of the
Society of Petroleum Engineers. The reserves estimates included in
this announcement are issued with the prior written consent of Mr
Stephens. Mr Stephen's qualifications include a Bachelor of
Engineering (Petroleum Engineering) from the University of New
South Wales, Australia, and 20 years of relevant
experience.
Additional
information for US investors concerning resource
estimates
· Woodside is an Australian company listed on the Australian
Securities Exchange, the New York Stock Exchange, and the London
Stock Exchange. As noted above, Woodside estimates and reports its
proved reserves in accordance with SEC regulations, which are also
compliant with SPE-PRMS guidelines, and estimates and reports its
proved plus probable reserves and 2C contingent resources in
accordance with SPE-PRMS guidelines. Woodside reports all petroleum
resource estimates using definitions consistent with
SPE-PRMS.
· The
SEC prohibits oil and gas companies, in their filings with the SEC,
from disclosing estimates of oil or gas resources other than
'reserves' (as that term is defined by the SEC). In this
announcement, Woodside includes estimates of quantities of oil and
gas using certain terms, such as 'proved plus probable (2P)
reserves', 'best estimate (2C) contingent resources', 'reserves and
contingent resources', 'proved plus probable', 'developed and
undeveloped', 'probable developed', 'probable undeveloped',
'contingent resources' or other descriptions of volumes of
reserves, which terms include quantities of oil and gas that may
not meet the SEC's definitions of proved, probable and possible
reserves, and which the SEC's guidelines strictly prohibit Woodside
from including in filings with the SEC. These types of estimates do
not represent, and are not intended to represent, any category of
reserves based on SEC definitions, and may differ from and may not
be comparable to the same or similarly-named measures used by other
companies. These estimates are by their nature more speculative
than estimates of proved reserves and would require substantial
capital spending over a significant number of years to implement
recovery, and accordingly are subject to substantially greater risk
of not being recovered by Woodside. In addition, actual locations
drilled and quantities that may be ultimately recovered from
Woodside's properties may differ substantially. Woodside has made
no commitment to drill, and likely will not drill, all drilling
locations that have been attributable to these quantities. U.S.
investors are urged to consider closely the disclosures in
Woodside's most recent Annual Report on Form 20-F filed with the
SEC and available on the Woodside website at
https://www.woodside.com/investors/reports-investor-briefings and
its other filings with the SEC, which are available at
www.sec.gov.