Is Woodside Energy Group positioned for a project led re-rating?

WDS looks like a project-led energy story with strong current operations, a visible growth pipeline, and enough financial flexibility to keep executing

Woodside Energy Group's (ASX: WDS) 

first quarter update showed a business that is still delivering strong operational reliability while advancing several major growth projects. The company reported quarterly production of 45.2 MMboe, average realised pricing of $63/boe and full year guidance left unchanged across production, capex and cost lines.

Operational performance

Woodside’s asset base performed well in the quarter with Sangomar, Shenzi, North West Shelf and Pluto LNG all delivering reliability at or above 99%. Pluto LNG achieved 100% reliability for the third consecutive quarter while North West Shelf delivered 99.7% showing that core operations remain dependable despite severe weather disruptions in Western Australia.

Production was down 8% from Q4 2025 due to seasonal weather events but sales volumes still rose 3% year on year to 51.7 MMboe. The higher realised price of $63/boe was driven by stronger spot market pricing and Woodside expects more of that benefit to flow through in later quarters because of LNG contract lags.

Project progress

The biggest value driver remains Woodside’s project pipeline. Scarborough Energy Project was 96% complete and remains on budget, with first LNG cargo still targeted for Q4 2026 after successful hook up of the FPU and ongoing topsides commissioning.

Trion also advanced well reaching 56% completion and staying on budget with first oil targeted for 2028. Louisiana LNG reached 24% completion in the foundation phase with Train 1 at 31% and the project remains on schedule for first LNG in 2029.

Portfolio and marketing

Beaumont New Ammonia was another milestone area with first ammonia cargo achieved in February and operational control transferred to Woodside in March. The company also noted that lower carbon ammonia production is now targeted for 2027 because of delays at third party industrial gas suppliers.

On the marketing side, Woodside said it had no disruptions from Middle East tensions and continued to benefit from strong LNG spot demand. Around 51% of LNG sold was linked to gas hub indices in the quarter while the company maintained limited exposure to volatile spot LNG carrier rates through its term shipping strategy.

Financial position

Operating revenue came in at $3.261 billion, up 7% versus Q4 2025, while capital expenditure and acquisitions totalled $1.323 billion for the quarter. Full year guidance was unchanged including production volumes of 172-186 MMboe, capex of $4.0 billion-$4.5 billion and production costs of $1.5 billion-$1.8 billion.
Liquidity remained solid at about $8.3 billion with net debt including lease liabilities at about $9.3 billion.

(Source: Company Reports)