2013 Half-Year Results Briefing

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1 2013 Half-Year Results Briefing Peter Coleman CEO & Managing gdirector 21 August 2013

2 Disclaimer and important notice This presentation contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limitedit to: price fluctuations, ti actual demand, d currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political l risks, project delay or advancement, approvals and cost estimates. t All references to dollars, cents or $ in this presentation are to U.S. currency, unless otherwise stated. References to Woodside may be references to Woodside Petroleum Ltd. or its applicable subsidiaries. 2

3 Financial headlines Operating revenue*: $2,857 million 8% Reported NPAT: $873 million 8% Net debt: $2.2 billion 54% Reported earnings per share: 106 cps** 6% Interim dividend per share: 83 cps 28% Special dividend id d per share: 63 cps * Operating revenue includes LNG processing revenue of $67 million ** cps = cents per share Positive increase versus 1H 2012 Positive decrease versus 1H

4 Business performance Safety metrics on right trend TRIR* of 3.46, on track to top quartile performance by 2017 Step change in production Record first-half production of 41.9 MMboe (up 23% on 1H 2012) Strong balance sheet to fund growth Fiscal discipline, special dividend Capturing potential new value-creating opportunities Myanmar, Leviathan, Ireland Building Strong Leadership * TRIR = Total Recordable Injury Rate per million hours worked 4

5 2013 Half-Year Results Briefing Financial Results Lawrie Tremaine Executive Vice President and Chief Financial Officer

6 Record first half production - up 23% (2.8) (1.9) (1.0) Mboe M Full, half-year of Pluto production Vincent FPSO planned overhaul Field decline at mature oil assets H 2012 Pluto NWS Oil Operations Impact* Vincent Net Field Decline** Pluto Unplanned Shutdown 1H 2013 * Operations impact includes changes in maintenance, reliability, cyclone impacts and any other changes not mentioned in the chart above ** Excludes Vincent Oil 6

7 Record first half revenue up 8% 3, Ope erating revenu ue (US$millio on) 2,500 2,000 1,500 1, ,446 2,102 2,253 2,655 2, Avera age Brent oil price (US$/bb bl) Major Variances 2012 to 2013 US$ million Pluto 600 Vincent volume -273 Other oil volumes -199 Other 74 Total H H H H H Revenue Average Brent 7

8 Pluto production increases first half costs (13) (8) (7) (3) 354 US $million Positive impact from weaker AUD 200 Production cost 1H 2012 Pluto Other increases Vincent offstation FX impact Laminaria MEX divestment Production cost 1H

9 Reported profit drivers NPAT up 8% , (35) (67) (87) 381 (126) (209) 1, US $million H 2012 NPAT Pluto Taxes & other Carbon Tax Exploration and Evaluation Impairments Sales Volumes (excl Pluto & Vincent) Vincent 1H 2013 NPAT 9

10 Investment expenditure ) Exp penditure (U US $million 5,000 4,000 3,000 2,000 1, ,267 3,369 Half year spend only $0.5 billion Full year spend $2.3 billion, $0.3 billion lower than previous guidance 260 1,071 2,400 2, E Pluto Other Exploration Leviathan 10

11 Generating positive free cash flows ion US $milli H H H H H 2013 Strong operating cashflow and lower investment outflows 2013 investing activities impacted by US$405 million tax payment for Browse partial equity sale 2500 Operating activities Investing activities Browse CGT Free Cash 11

12 Liquidity to fund growth ion For personal use only US$ mill 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2, ,000 - Cash and debt position H H 2013 Drawn debt Undrawn debt Cash Net Debt Cash and undrawn facilities of US$ billion to fund growth 400 US$2.1 billion in debt matures by end Net debt of US$2.2 billion, down 54% from 1H 2012 Average cost of debt 3.6% on a portfolio basis Special dividend payment in 1H 2013 Debt (US$ million) 1,800 1,600 1,400 1,200 1, Drawn Bank Debt US Bonds 83 1,100 Debt maturity profile ,

13 Interim dividend 83 cps, up 28% % payout ratio achieved end (US cps s) In nterim divid H H H H H 2013 Interim Dividend (US cps) Underlying EPS (US cps) Un nderlying EP PS (US cps) 1H dividends of US146 cents per share, including special dividend Weaker AUD provides higher AUD dividends Negative impact of impairment on EPS 13

14 Capital management 2013/14 focus area Capital Mgmt Superior shareholder returns add Operati ons add Growth Enhan ced Margin s Disciplined i investment decisions Maximise cash generation Manage asset portfolio Cost management focus 80% dividend target Balance sheet positioned for growth 13% gearing S&P credit rating outlook positive (BBB+) Superior shareholder returns High Performance Culture 14

15 2013 Half-Year Results Briefing Strategy and Delivery Peter Coleman CEO & Managing Director

Operations add Growth Enhanced Margins 2014 Capturing Technology 2014 High Impact

16 Company Strategy well advanced Superior shareholder returns Strong culture and values underpin performance 2013 focus areas well advanced 2014 and beyond Capital Mgmt add Operations add Growth Enhanced Margins 2014 Capturing Technology 2014 High Impact Exploration Capturing value through technology High impact exploration High Performance Culture 16

17 Additional value from base business Superior shareholder returns Enhan Capital ced add add Mgmt Margin Operati Growth s ons High Performance Culture More value from operations: Pluto sustained production Okha FPSO increased production NWS and Pluto 2013 shutdowns complete Major projects in progress: Vincent NRB GWF Phase-1 17

Kimberley FLNG Shell FLNG key principles agreed Commonwealth retention leases varied Superior

18 Browse FLNG enables earliest commercialisation Joint Venture re-aligned James Price Point not commercially viable Alternative development concepts evaluated Browse to Burrup Browse to Kimberley FLNG Shell FLNG key principles agreed Commonwealth retention leases varied Superior shareholder returns Capital Mgmt add Operati ons add Growth Enhan ced Margin s High Performance Culture 18

19 Phased FLNG development lowers risk Superior shareholder returns Woodside recommends FLNG to Browse Joint Venture* Targeting mid 2015 FID Reference case - 3 facilities FLNG provides Phased capital expenditure Improved risk profile Early cash generation Capital Mgmt add Operati ons add Growth Enhan ced Margin s Execute Operate FLNG 3 High Performance Culture FID Execute Operate FLNG 2 Concept Select BOD FEED Execute Operate FLNG 1 * Note the recommendation outlined is subject to Joint Venture approval 19

20 Managing our growth NWS - NR2 NWS - Greater Western Flank 1 Pluto - Xena Vincent Phase IV Well NWS - Persephone Browse 1 NWS - Greater Western Flank 2 Laverda NWS - Lambert Deep West 2H % volumes ~ 5 Tcf ~ 1.1 Tcf Part of Pluto ~ 4 MMboe ~ 140 MMboe ~ 15.9 Tcf, 436 MMbbl ~ 1.7 Tcf > 100 MMboe ~ 0.2 Tcf Browse 2 Part of Browse 1 Browse 3 Part of Browse 1 Sunrise Superior shareholder returns BOD FEED Execute ~ 5.1 Tcf, 226 MMboe Capita l Mgmt add Operati ons add Growt h Enha nced Margi ns High Performance Culture 20

21 Leviathan gas reservation supports investment case A world class asset with gross mean resources estimated at 18 Tcf of natural gas Leviathan domestic gas reservation of 50% Further clarity from high court in September Development concept enables LNG Superior shareholder returns Capita l Mgmt add Operati ons add Growt h Enha nced Margi ns High Performance Culture 21

Enhanced margins through price renegotiation Positive progress on LNG

traditional regional indexation We have reached in-principle agreement on

apply from 1 April 2014 Woodside Equity LNG output Superior shareholder

add Growth Enhan ced Margin s 2012 High Performance Culture Volumes

22 Enhanced margins through price renegotiation Positive progress on LNG price review negotiations On trend with current regional pricing and traditional regional indexation We have reached in-principle agreement on new pricing for significant portion of volumes New prices will largely apply from 1 April 2014 Woodside Equity LNG output Superior shareholder returns Wood dside Equity LN NG 2013 Q Capital Mgmt add Operati ons add Growth Enhan ced Margin s 2012 High Performance Culture Volumes renegotiated In principle agreement Volumes under long term contract subject to price renegotiation 22

Regional pricing remains strong Potential ti US LNG supply to have limited it influence on weighted average prices Medium term LNG demand and prices remain solid 24 Weighted average LNG price *

23 Regional pricing remains strong Potential ti US LNG supply to have limited it influence on weighted average prices Medium term LNG demand and prices remain solid 24 Weighted average LNG price * (Source: Poten & Partners) 18 US$/MMBtu For personal use only 12 Superior shareholder returns Enhan Capital ced add add Mgmt Margin Operati Growth s ons High Performance Culture 6 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Japan South Korea Taiwan JCC (n 3) JCC = average price of crude oil imports into Japan. Asian long term LNG price formulae typically include a 3 month lag to the relevant JCC / oil index. * For Japan, South Korea and Taiwan with comparison to the Japan Customs Cleared Crude Oil Price ("JCC") 23

Technology delivering results Floating LNG

Growt Margi ology h ns High Impact Explora

24 Technology delivering results Floating LNG Subsea Compression High-definition seismic Superior shareholder returns Capita l Mgmt add Operat ions Capturi Enha ng add nced Techn Growt Margi ology h ns High Impact Explora tion High Performance Culture Source: Offshore Magazine 24

25 2013 Half-Year Results Briefing Exploration Activities Phil Loader Executive Vice President Global Exploration

26 Building the foundation for exploration growth Building Balanced Portfolio Predictive, consistent delivery Balance between: Frontier Emerging Mature Capita l Mgmt add Operat ions Superior shareholder returns Capturi Enha ng add nced Techn Growt Margi ology h ns Build momentum and scale High impact Material value Diversity High Impact Explora tion Global Exploration Leverage our capabilities Technology Organisational competitivenesseness Technical / commercial excellence Capabilities and Culture Woodside exploration culture Creative, innovative Science-based Full engagement between experts and explorers High Performance Culture 26

27 A global approach Frontier / emerging basins; multiple play types; petroleum system driven Technical / commercial rigour building scale and value Building for future predictive and consistent delivery Superior shareholder returns Capturi Enha High Capita ng add nced Impact l add Techn Growt Margi Explora Mgmt Operat ology h ns tion ions High Performance Culture 27

28 Building a balanced portfolio Pr robability of Success s Core Superior shareholder returns Capita l Mgmt add Operat ions Capturi Enha ng add nced Techn Growt Margi ology h ns High Performance Culture High Impact Explora tion Non Core Monetise / Divest Woodside Thresholds 28

Foundations for excellence and growth Leading-edge Technology Fortuna 3D seismic survey First application of IsoMetrix in Australia Superior subsurface imaging; cost savings Innovative Culture

29 Foundations for excellence and growth Leading-edge Technology Fortuna 3D seismic survey First application of IsoMetrix in Australia Superior subsurface imaging; cost savings Innovative Culture Petroleum Systems Analysis (Source, Reservoir, Migration, Trap, Seal) Capita l Mgmt add Operat ions Superior shareholder returns Capturi Enha ng add nced Techn Growt Margi ology h ns High Impact Explora tion Expert / Explorer engagement (leverage core competencies to mitigate risk & manage uncertainty) High Performance Culture 29

30 2013 Half-Year Results Briefing Conclusion Peter Coleman CEO & Managing Director

31 Laying the foundations for long-term success Strong financial position sustained dhigh hdividendsid d ability to fund growth LNG pricing remains robust Company growth strategy well advanced Global exploration strategy underway 31

32 2013 Half-Year Results Briefing Questions and Answers

33 2013 Half-Year Results Briefing Appendix

34 Biographies Phil Loader Executive Vice President Global Exploration Industry Experience: 33 years Joined Woodside: 2013 Previous Industry Roles: Senior Vice President Exploration Mubadala Petroleum, Vice President International Exploration Anadarko Exploration Company, Exploration Manager West Africa Triton Energy, International Exploration Manager Sasol Petroleum limited, Johannesburg Shaun Gregory Senior Vice President Health, Safety, Environment and Technology Industry Experience: 21 years Joined Woodside: 1995 Previous Woodside roles: VP Global New Ventures, VP Geoscience, Technology & Operations, GM Geotechnical Operations, GM Business & Strategic Infrastructure Browse, Houston Deepwater Exploration Manager, Chief Geophysicist Previous industry roles: Explorationist BHP 34

35 Biographies Stephen Rogers Senior Vice President Browse Industry Experience: 36 years Joined Woodside: 2012 Previous Industry Roles: President & CEO Nautilus Minerals Group, CEO Oil & Gas Clough, Managing Director Technip Oceania Prior to this involved in a variety of corporate and project management roles, with both contracting and operating companies. Philip Allison Senior Vice President Projects Industry Experience: 35 years Joined Woodside: 2012 Previous Industry Roles: Chief Project Manager, Santos, Vice President Projects BP Egypt, Project Director BTC & SCP Projects BP Azerbaijan, Project Manager Decommissioning NW Hutton BP Aberdeen, Programme Manager BP Alaska, Project Manager BP Colombia, Manager Technical Support Group BP Aberdeen, Project Manager, Foster Wheeler 35

2014 half-year results briefing. Peter Coleman CEO and Managing Director 20 August 2014

2014 half-year results briefing Peter Coleman CEO and Managing Director 20 August 2014 Disclaimer and important notice This presentation contains forward looking statements that are subject to risk factors