Woodside beats Q2 revenue estimates, exits hydrogen project as reality bites

Australia's Woodside Energy reported a stronger-than-expected eight per cent rise in second-quarter revenue on Wednesday due to robust output from Senegal's Sangomar project, but took hefty writedowns on a failed hydrogen venture and aging offshore facilities.

The revenue beat underscores the strong performance of the Sangomar project, which has contributed $510 million in revenue for the quarter. The company's overall production jumped 13 per cent to 50.1 million barrels of oil equivalent (boe) during the quarter, up from 44.4 million boe in the same period last year.

The country's top gas producer posted revenue of $3.28 billion for the three months ended June 30, surging eight per cent from $3.04 billion a year earlier and exceeding the Visible Alpha consensus estimate of $3.09 billion.

Woodside also reduced annual unit production costs to $8 to $8.50 per boe from $8.50 to $9 per boe.

Shares rose as much as 2.4 per cent to a one-month high of A$25.44 by 0057 GMT, outpacing gains of over one per cent in the broader energy sub-index.

However, the company said it was abandoning its H2OK hydrogen project in Oklahoma, citing cost escalation and weaker-than-expected demand in the low-carbon hydrogen sector. The exit will result in an impairment loss of about $140 million on a pre-tax basis.

"We have made the decision to exit the H2OK Project, demonstrating our disciplined approach to portfolio management," the company said.

Woodside also faces mounting decommissioning costs for its aging Minerva, Stybarrow and Griffin offshore facilities, with technical challenges at closed sites driving up expenses. The company expects to book $400-$500 million in pre-tax charges related to the decommissioning work.

On the positive side, Woodside completed the sale of a 40 per cent stake in its Louisiana LNG project to Stonepeak for $5.7 billion in June, with the buyer agreeing to fund 75 per cent of the project's capital expenditures in 2025 and 2026. The company said it continues to attract interest from potential partners for further stakes.

Woodside in late March agreed to sell offshore oil and gas assets in Trinidad and Tobago to London-based Perenco, which included production facilities and interests in shallow water fields.

As a result of the asset sale, Woodside marginally adjusted its 2025 production forecast to between 188 million and 195 million boe, compared with its previous guidance range of 186 million to 196 million boe.

(Reporting by Roushni Nair and John Biju in Bengaluru; Editing by Devika Syamnath, Alan Barona and Christian Schmolinger)