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.
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
- Unless otherwise stated, all petroleum resource estimates are
quoted as at the effective date of 26 March 2024, net Woodside
share.
- 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.
- 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.
- The reference point is defined as the outlet of the downstream
(onshore) gas processing facility.
- ‘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.
- 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.
- 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.
- ‘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.
- ‘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).
- ‘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.
- ‘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.
- ‘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.
- 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.
__________________________
1 The sale and purchase agreement is with
LJ Scarborough Pty Ltd, 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.
2 The sale proceeds remains subject to
adjustments.
3 Completion is expected in the second
half of 2024.
4 Fuel consumed in operations proved (1P)
undeveloped reserves will reduce by 14.2 MMboe to 127.6 MMboe
(Woodside share).
5 Fuel consumed in operations proved +
probable (2P) undeveloped reserves will reduce by 22.0 MMboe to
198.4 MMboe (Woodside share).
6 Fuel consumed in operations Best
Estimate (2C) contingent resources will reduce by 0.3 MMboe to 2.3
MMboe
(Woodside share).
7 Excludes the Thebe and Jupiter
fields.
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version on businesswire.com: https://www.businesswire.com/news/home/20240325388314/en/
INVESTORS Marcela Louzada M: +61 456 994 243 E:
investor@woodside.com
MEDIA Christine Forster M: +61 484 112 469 E:
christine.forster@woodside.com
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