Episode Details

Woodside Energy Group Ltd (WDS) H1 2026 — H1 2026 (six months ended June 30, 2026): operating revenue $7,446m vs $6,590m; NPAT $1,672m vs $1,316m; underlying NPAT $1,334m vs $1,247m; basic EPS 88.2 US cps vs 69.4. Released to the ASX on the morning of Aug 25 Australian time - 19:00 US Central on Mon Aug 24, four hours after the NYSE close - so the ADSs gapped -4.62% on Aug 25 and closed -4.03% on 1.95x 20-day volume, then added 0.17% on Aug 26. Woodside's H1 2026 revenue rose 13% to $7,446m and profit rose 27% to $1,672m. Free cash flow rose 159% to $352m and capital expenditure fell 36% to $1,637m. Both of those last two turn on one figure: $1,725m of capital contributions received from Stonepeak and Williams for the Louisiana LNG terminal. The report states the $352m free cash flow INCLUDES it, and the company's own reconciliation on page 67 SUBTRACTS the same $1,725m from capital additions of $3,362m to reach the reported $1,637m. Strip it out and free cash flow was -$1,373m, and gross spending fell 24%, not 36%. THE CALL: HOLD (3/5, A GOOD PRODUCING BASE, A HEADLINE HALF PAID FOR BY PARTNERS) — base-case value ~$24.22 vs ~$22.90 today. KEY METRICS: - THE SPINE: $1,725m of partner capital contributions is ADDED into the reported $352m free cash flow and SUBTRACTED from reported capital expenditure. Both treatments are disclosed. Neither is cash the business earned. - WITHOUT IT: free cash flow was -$1,373m (from -$1,734m a year ago, so it did improve). On the plainest definition - operating less investing cash - the half consumed $1,273m while paying $1,122m of dividends. - THE CEILING: Stonepeak committed up to $5,700m and had paid $4,262m by June 30 - 74.8% - against a Louisiana LNG terminal 28% complete with first cargo targeted 2029. Only $1,438m is left and it cannot be topped up. - FRONT-LOADED BY DESIGN: Stonepeak owns 40% of Louisiana LNG Infrastructure but contributes 75% of expected project capex, in 2025 and 2026 only. On the call an analyst noted the contribution is fixed, so overruns fall on Woodside. - A NON-CASH HALF: statutory NPAT of $1,672m EXCEEDS underlying $1,334m because $507m post-tax of deferred tax assets were recognised. That is 30% of reported profit; cash tax PAID rose to $825m. - MORE REVENUE FROM FEWER BARRELS: production fell 13% to 86.5 MMboe while the realised price rose 20% to $74.0/boe. The July 29 Q2 report had already published $4,185m of quarterly revenue. - THE STREET: seven named, dated Australian targets average A$31.54, or $22.58 - below the tape. All three notes published on results day are Hold and two were cuts. We value WDS at $24.22 against $22.90: HOLD, 3/5. What to watch: UP: Scarborough is 98% complete with first cargo targeted this quarter, guidance implies a bigger second half than the first, reliability ran 98.7% / 99.5% / 99.1%, and a $350m cost-out target starts in 2028. DOWN: only $1,438m of the $5,700m partner ceiling is left against a terminal 28% built, $9,699m of contracted spending is still to come, and gearing is 20.6% against a 10-20% target. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.