Filed by Woodside Petroleum Ltd.
Pursuant to Rule 425 of the Securities Act of
1933
Subject Companies: BHP Group Ltd (Commission File
No.: 001-09526)
BHP Group Plc (Commission File No.: 001-31714)
INVESTOR
UPDATE 2021 8 December 2021 www.woodside.com.au
investor@woodside.com.au
Disclaimer, risks and
assumptions Disclaimer and risks Notes to petroleum resources
estimates • Our investors and potential investors have requested
that Woodside continues to provide further detail and information
in 1. Unless otherwise stated, all petroleum resource estimates are
quoted as at the balance date (i.e. 31 December) of the Reserves
respect of Woodside’s overall strategic approach and its potential
implications for the company. This presentation is a response
Statement in Woodside’s most recent Annual Report released to the
Australian Securities Exchange (ASX) and available at to those
requests. It is in summary form and does not purport to be
complete. It should be read in conjunction with Woodside’s
https://www.woodside.com.au/news-and-media/announcements, net
Woodside share at standard oilfield conditions of 14.696 psi
periodic reporting and other announcements made to the Australian
Securities Exchange. (101.325 kPa) and 60 degrees Fahrenheit (15.56
degrees Celsius). The Reserves Statement dated 31 December 2020 has
been subsequently updated by ASX announcements dated 15 July 2021,
18 August 2021, 21 October 2021, 5 November 2021 and 22 • Given
that this presentation is focused on Woodside’s strategy, it is
necessarily oriented towards future events. Neither the November
2021. Woodside is not aware of any new information or data that
materially affects the information included in the strategy, nor
this presentation more generally, is a statement that future events
will or are likely to occur. Reserves Statement. All the material
assumptions and technical parameters underpinning the estimates in
the Reserves Statement • The discussion of Woodside’s strategy
provides some level of insight into how Woodside currently intends
to direct the continue to apply and have not materially changed.
management of its assets and to deploy its capital, in order to
achieve certain strategic outcomes. The matters disclosed in this
2. Woodside reports reserves net of the fuel and flare required for
production, processing and transportation up to a reference
presentation are a ‘point in time’ disclosure of Woodside’s
strategic focus. Woodside operates in a dynamic market and external
point. For offshore oil projects, the reference point is defined as
the outlet of the floating production storage and offloading
environment. Strategies can and must adapt in response to dynamic
market conditions, joint venture decisions, new facility (FPSO),
while for the onshore gas projects the reference point is defined
as the inlet to the downstream (onshore) opportunities that might
arise or other changing circumstances. Investors should not assume
that the strategy and targets processing facility. discussed in
this presentation are locked in. In addition, a number of
Woodside’s proposed developments or strategies are complex and may
be delayed, more costly than anticipated or unsuccessful for many
reasons. 3. Woodside uses both deterministic and probabilistic
methods for estimation of petroleum resources at the field and
project levels. Unless otherwise stated, all petroleum estimates
reported at the company or region level are aggregated by
arithmetic • This presentation contains forward looking statements
that are subject to risk factors, including those associated with
oil and gas summation by category. Note that the aggregated Proved
level may be a very conservative estimate due to the portfolio
effects businesses as well as those in connection with the proposed
combination of Woodside and BHP Group Limited’s oil and gas of
arithmetic summation. business (the “Transaction”). The information
and statements in this presentation about Woodside’s future
strategy, including 6 with regard to the Transaction, are not
guidance, forecasts, guarantees or predictions of future events or
performance, but are in 4. ‘MMboe’ means millions (10 ) of barrels
of oil equivalent. Dry gas volumes, defined as ‘C4 minus’
hydrocarbon components and the nature of aspirational targets that
Woodside has set for itself and its management of the business.
Actual performance non-hydrocarbon volumes that are present in
sales product, are converted to oil equivalent volumes via a
constant conversion against these targets (including all items that
are described as a target) may be affected by various risks
associated with the factor, which for Woodside is 5.7 Bcf of dry
gas per 1 MMboe. Volumes of oil and condensate, defined as ‘C5
plus’ petroleum Woodside business and the Transaction, many of
which are beyond Woodside’s control. Further detail on certain of
these risks components, are converted from MMbbl to MMboe on a 1:1
ratio. can be found in the “Risk” section of Woodside’s most recent
Annual Report which was released to the Australian Securities 5.
The estimates of petroleum resources are based on and fairly
represent information and supporting documentation prepared
Exchange on 18 February 2021. Investors and prospective investors
should review and have regard to these risks when under the
supervision of and approved by Mr Jason Greenwald, Woodside’s Vice
President Reservoir Management. Mr Greenwald considering the
information contained in this presentation. The reader is cautioned
not to place undue reliance on any forward is a full-time employee
of the company and a member of the Society of Petroleum Engineers.
His qualifications include a Bachelor looking statements contained
in this presentation. of Science (Chemical Engineering) from Rice
University, Houston, Texas, and more than 20 years of relevant
experience. • It is believed that the expectations reflected in
these statements are reasonable as at the date of this presentation
but they may Assumptions be affected by a variety of variables and
changes in underlying assumptions which could cause actual results
or trends to differ • Unless otherwise indicated, the targets set
out in this presentation have been estimated on the basis of a
variety of economic materially, including but not limited to the
Risks referenced above and price fluctuations, actual demand,
currency fluctuations, assumptions including: (1) a US$65/bbl Brent
oil price (2022 real terms, inflated at 2.0%); (2) currently
sanctioned projects being drilling and production results, reserve
estimates, loss of market, industry competition, environmental
risks, physical risks, delivered in accordance with their current
project schedules; and (3) applicable growth opportunities being
sanctioned and legislative, fiscal and regulatory developments,
changes in accounting standards, economic and financial market
conditions in delivered in accordance with the target schedules
provided in this presentation. These growth opportunities are
subject to various countries and regions, political risks, project
delay or advancement, approvals and cost estimates. Some matters
are relevant joint venture participant approvals, commercial
arrangements with third parties and regulatory approvals being
subject to approval of joint venture participants. The targets and
opportunities described in this presentation might also change
obtained in the timeframe contemplated or at all. Woodside
expresses no view as to whether its joint venture participants will
materially if Woodside changes its strategy. agree with and support
Woodside’s current position in relation to these opportunities, or
such commercial arrangements and • Woodside makes no
representation, assurance or guarantee as to the accuracy or
likelihood of fulfilment of any forward-looking regulatory
approvals will be obtained. Additional assumptions relevant to
particular targets or other statements in this statement or any
outcomes expressed or implied in any forward-looking statement. The
forward-looking statements in this presentation may be set out in
the relevant slides. Any such additional assumptions are in
addition to the assumptions and presentation reflect expectations
held at the date of this presentation. Woodside does not undertake
to provide ongoing market qualifications applicable to the
presentation as a whole. updates on, or otherwise report against,
performance in relation to the information in this presentation, or
in relation to any • Woodside “greenhouse gas” or “emissions”
information presented are Scope 1 and Scope 2 emissions released to
the change in the company’s strategy, except to the extent it has a
legal obligation to do so. atmosphere as a result of an activity,
or series of activities, at a facility level. Greenhouse gas
definitions and global warming • There is no certainty or assurance
that the proposed merger between Woodside and BHP Petroleum will
complete on the potentials to convert emissions into tonnes of
carbon dioxide equivalent (tCO -e) are as per Australia’s National
Greenhouse and 2 intended schedule or at all. Information in this
presentation that is presented on a post-merger basis must be read
subject to Energy Reporting scheme. that uncertainty. Other
important information • This document has been prepared by Woodside
and relies on information provided by BHP (“BHP Information”).
Although • All references to dollars, cents or $ in this
presentation are to US currency, unless otherwise stated. Woodside
has taken steps to confirm the BHP Information, it has not
independently verified it and expressly disclaims any
responsibility for it, to the maximum extent permitted by law. No
representation or warranty, express or implied, is made as to •
References to “Woodside” may be references to Woodside Petroleum
Ltd or its applicable subsidiaries. the fairness, currency,
accuracy, adequacy, reliability or completeness of the BHP
Information. • This presentation does not include any express or
implied prices at which Woodside will buy or sell financial
products. 2
Agenda
STRATEGY 1 2 CAPITAL ALLOCATION SHAREHOLDER RETURNS 3 CLIMATE 4 NEW
ENERGY 5 MERGER AND DEVELOPMENTS 6 3
Thriving
through the energy transition PROFITABLE LOWER CARBON RESILIENT
OPTIMISE VALUE AND LOW COST DIVERSIFIED SHAREHOLDER RETURNS
4
Strategic
framework COMPETITIVE DISCIPLINED CAPITAL ADVANTAGE ALLOCATION
Robust assessment of Highly valued products opportunities,
portfolio outcomes World-class Tier 1 assets and shareholder
returns Enablers Diversification within known Disciplined capital
spend value chains bound by defined targets Safe and reliable
operations Strong balance sheet Technology HIGH PERFORMING MARKET
CULTURE ANALYSIS Responsible environmental, social Energy markets
supply, and governance (ESG) mindset demand and price outlook
Engaged, accountable and Scenarios inform new energy trajectory
diverse workforce and existing business 5
ESG is
part of our core business Environmental Social Governance Climate
change resilience and transition Social and cultural impacts on
communities Health safety and wellbeing Environment and
biodiversity People and culture Corporate governance
Decommissioning Supply chain and local content Major incident
preparedness Human Rights 6
Market
analysis Estimated cumulative investment under the range of IEA
scenarios ($US trillion) Investment in oil and gas exceeds hydrogen
investment in all scenarios Increased investment in hydrogen needed
to support the Net Zero Emissions 2050 pathway Stated Not Paris
aligned. Global temperature rise Policies (STEPS) above 2ºC
>2.0°C Announced Not Paris aligned. Global temperature rise
Pledges (APS) to 2.1ºC with a 50% probability ~2.1°C Paris aligned
scenario. Global temperature Sustainable rise is limited to 1.65ºC
with a 50% Development (SDS) probability (potentially 1.5ºC with
some ~1.5 to 1.65°C level of net negative emissions) Net Zero
Emissions Paris aligned scenario. Global temperature Oil and gas
Hydrogen (NZE2050) rise is limited to 1.5ºC with a 50% ~1.5°C
probability 7 IEA World Energy Outlook 2021 and IEA Net Zero by
2050: a roadmap for the global energy sector, Woodside analysis,
real terms 2019.
Climate
testing 1 Indicative average annual free cash flow under the range
of IEA scenarios Product pricing is the primary driver of the
variation Portfolio decisions are assessed against a wide range of
climate scenarios Climate scenarios include International Energy
Agency (IEA) scenarios IEA scenarios are credible, global,
transparent and include independently published Stated Announced
Sustainable Net Zero IEA assumptions Policies Pledges Development
Emissions SCENARIOS 3 (STEPS) (APS) (SDS) (NZE2050) 2 TESTED
>2.0°C ~2.1°C ~1.5 to 1.65°C ~1.5°C 1. Based on the combined
Woodside and BHP petroleum portfolio equity of Scarborough (100%),
Sangomar (82%), Pluto Train 2 (51%) and a varying mix of future
portfolio growth investments. Not guidance, illustrative only. 2.
Woodside’s assessment of IEA scenarios utilising IEA price
assumptions for oil, gas and carbon. 3. Using pricing data from IEA
WEO 2021, which estimated a global temperature rise of 2.1ºC. The
IEA subsequently indicated that an updated version of the APS could
lead 8 to a temperature rise of 1.8ºC if all COP-26 pledges are met
in time and in full, but has not released details of this new
scenario.
Portfolio
and opportunity optimisation Opportunity evaluation considerations
Portfolio evaluation considerations Free cash Funding Emissions
Payback Strategic EPS IRR/NPV Risk Breakeven flow capacity profile
period fit Growth opportunities are screened against portfolio
metrics using price, scenario and climate analysis 9
Capital
allocation framework OIL GAS NEW ENERGY OFFSHORE PIPELINE LNG
DIVERSIFIED Generate high returns to fund New energy products and
lower Leveraging infrastructure to monetise undeveloped diversified
growth, focusing on carbon services to reduce customers’ FOCUS gas,
including optionality for hydrogen high quality resources
emissions; hydrogen, ammonia, CCUS Stable long-term cash High cash
generation Long-term cash flow Developing market flow profile
Shorter payback period Strong forecast demand Lower capital
requirement CHARACTERISTICS Resilient to commodity Quick to market
Upside potential Lower risk profile pricing IRR > 15% IRR >
12% IRR > 10% OPPORTUNITY 1 1 1 TARGETS Payback within 5 years
Payback within 7 years Payback within 10 years EMISSIONS 2 30% net
emissions reduction by 2030, net zero aspiration by 2050 or sooner
REDUCTIONS CCUS refers to carbon capture utilisation and storage.
1. Payback refers to RFSU + X years. 2. Target is for equity net
Scope 1 and 2 emissions. Baseline is set as the gross average
equity Scope 1 and 2 emissions over 2016-2020 and may be adjusted
(up or down) for potential equity changes in producing or
sanctioned assets with an FID prior to 10 2021. Post-completion of
the Woodside and BHP petroleum merger (which remains subject to
conditions including regulatory approvals), the baseline will be
adjusted for the then combined Woodside and BHP petroleum
portfolio.
Shareholder returns
OPTIMISE VALUE AND SHAREHOLDER RETURNS Special dividends Safe,
Dividend Strong Share reliable and Investment policy balance
buy-backs low cost expenditure (minimum 50% sheet payout ratio)
operations Excess cash Future investment Investment grade Maintain
dividend based Targeted credit rating on NPAT, targeting 15-35%
gearing 50-80% payout ratio 11
Thriving
in a lower-carbon future DECARBONISATION TARGETS Emissions
reduction targets apply to 15% Woodside’s equity portfolio
(operated 30% Net zero and non-operated) by 2025 by 2030 aspiration
by 2050 or sooner 1 Equity net emissions reduction targets Clear
targets consistent with 3 Paris-aligned pathways $5 billion Diverse
carbon abatement through 2 Invested in new energy products and
lower carbon services by 2030 • Design out • Operate out • Offset
1. Target is for equity net Scope 1 and 2 emissions. Baseline is
set as the gross average equity Scope 1 and 2 emissions over
2016-2020 and may be adjusted (up or down) for potential equity
changes in producing or sanctioned assets with an FID prior to
2021. Post-completion of the Woodside and BHP petroleum merger
(which remains subject to conditions including regulatory
approvals), the baseline will be adjusted for the then combined
Woodside and BHP petroleum portfolio. 2. Investment target assumes
completion of the proposed merger with BHP’s petroleum business.
Individual investment decisions are subject to Woodside’s
investment hurdles. Not guidance. 3. Scope 1 and Scope 2 net
emissions trajectory consistent with the SSP1-1.9 (1.4ºC) to
SSP1-2.6 (1.8ºC) pathways in the Working Group 1 contribution to
the IPCC’s Sixth Assessment Report. Relative oil and gas versus
hydrogen potential investment consistent with a range of outcomes
predicted between IEA’s Net Zero Emissions (NZE2050) and
Sustainable Development Scenario (SDS). The NZE2050 global
temperature rise is limited to 1.5ºC with a 50% probability and the
SDS global temperature rise is limited to 1.65ºC with a 50% 12
probability (potentially 1.5ºC with some level of net negative
emissions).
Scope 3
emissions approach INVEST NEW ENERGY PRODUCTS | LOWER CARBON
SERVICES 1 $5 billion invested by 2030 Collaboration with customers
to build market demand Recent announcements: Heliogen, H2Perth,
H2TAS, H2OK, CCS SUPPORT PROMOTE CUSTOMER AND SUPPLIER EMISSIONS
REDUCTION GLOBAL MEASUREMENT AND REPORTING Carbon offset cargoes |
Methane Emerging harmonisation of global standards Shipping |
Contracting | Business travel Transparent emissions reporting 2
Investment consistent with Paris-aligned pathways CCS refers to
carbon capture and storage. 1. Investment target assumes completion
of the proposed merger with BHP’s petroleum business. Individual
investment decisions are subject to Woodside’s investment hurdles.
Not guidance. 2. Relative oil and gas versus hydrogen potential
investment consistent with a range of outcomes predicted between
IEA’s Net Zero Emissions (NZE2050) and Sustainable Development
Scenario (SDS). The NZE2050 13 global temperature rise is limited
to 1.5ºC with a 50% probability and the SDS global temperature rise
is limited to 1.65ºC with a 50% probability (potentially 1.5ºC with
some level of net negative emissions).
Energy
transition plan 2021 Mid-2020s 2030+ ENERGY TRANSITION PROGRESS
Market Early new energy New energy development transition at scale
• Build relationships across value chain• Achieve start-up of new
energy • Export liquid hydrogen from projects Australia •
Technology flexible (hydrogen, CCS, renewables)• Scale-up carbon
offset projects• Scale-up CCS activities • Secure land and
customers for projects• Export ammonia from Australia• Expand
production to match market scale • Grow offsets portfolio to
support base • Develop CCU opportunities business • Progress CCS
opportunities • Develop CCS opportunities • Leverage existing
capabilities • Expected to play a key role in realisation of
climate targets Hydrogen for heavy • Truck manufacturers scaling up
hydrogen fuel cell operations vehicle transport • Line of sight to
diesel price parity NEAR-TERM CUSTOMER FOCUS AREAS Ammonia for
power • Transportable, price competitive option to reduce carbon
emissions generation• Exploring opportunities with existing
customers CCS refers to carbon capture and storage. CCU refers to
carbon capture and utilisation. 14 All dates and plans are Woodside
targets unless otherwise specified and subject to market
conditions, regulatory approvals, government approvals and
commercial agreements.
New energy
opportunities H2Perth | Flexible design for hydrogen or ammonia
H2OK | Emerging opportunity for heavy transport sector • Initial
phase targeting ~110,000 tpa• Initial phase targeting ~33,000 tpa
of hydrogen production including of liquid hydrogen leveraging 250
MW electrolysis component existing renewable network including 250
MW electrolysis component • Future capacity of up to ~550,000 tpa
of hydrogen for export • Future capacity of up to (in form of
ammonia and liquid ~65,000 tpa of liquid hydrogen hydrogen) • MOU
executed with Hyzon Motors • Potential to scale to more than •
Targeting final investment decision 3 GW H2 2022 H2TAS | Well
positioned for early renewable hydrogen Heliogen | Breakthrough
solar technology • Initial phase targeting 200,000 tpa • Initial
phase targeting 5 MW of ammonia and a 300 MW • Concentrated solar
energy system electrolysis component to deliver clean energy with •
Potential to support up to 1.7 GW nearly 24/7 availability of
electrolysis • Targeting execution to begin in • Completed studies
with potential 2022 customers for ammonia export to • Enables
pathway to large-scale, Japan cost-effective renewable power source
15
New energy
growth plan Cumulative capacity (megawatts, indicative) Potential
2030 capacity ~3,000 megawatts Phased project expansion to match
customer demand FEED | Execute Phase 1 (Pluto) Phase 2 Power for
base business Phase FEED | Execute Phase 1 Phase 2 Heliogen 3
Assess | Select | FEED | Execute Phase 1 Phase 2 H2Perth Select |
FEED | Execute Phase 1 Phase 2 H2TAS FEED | Execute Phase 1 Other
potential opportunities H2OK All dates and plans are Woodside
targets unless otherwise specified and subject to market
conditions, regulatory approvals, government approvals and
commercial agreements. 16 Assess/select/FEED/execute phases
relevant only to initial phase of projects. Project phase timing
and capacity is indicative only. Not guidance.
Carbon
business • Diverse, cost competitive foundation portfolio to
support base business and Scarborough demand • Collaboration with
customers for supply of carbon offset cargoes Secured offsets to
meet 2025 High quality • ~10,000 ha of land secured for planting
native trees net emissions reduction target offsets • Extended
relationship with Greening Australia to source and lease portions
of farmland in Western Australia On track to meet 2030 net •
Existing and planned Australian land-based projects expected to
emissions reduction target deliver ~2.5 million tonnes of offsets
(CO -e) by 2040 2 COP26 agreement on Article 6 enables development
of a robust • Assessing opportunity to develop a large-scale,
multi-user global carbon market project near Karratha, Western
Australia Carbon capture • Consortium established with bp and Japan
Australia LNG (MIMI) and storage Pty Ltd to study carbon capture
and storage • Supports further emissions reduction after 2030
17
2021
priorities delivered and a merger Cost and efficiency
transformation DISCIPLINED 1 underway EXPENDITURE Achieved targeted
Scarborough FID in H2 2021 2 Proposed merger with CREATE AND 5
BHP’s petroleum PROTECT VALUE 3 business Delivering Sangomar Phase
1 Delivering value through BUILD OUR 4 the energy transition
SUSTAINABLE FUTURE 18
Merger
strategic rationale + All-stock merger of Woodside and BHP
Petroleum Petroleum Complementary, long-life, high margin, tier 1
assets PORTFOLIO QUALITY Strengthens cash generation and balance
sheet CASH GENERATION AND BALANCE SHEET Supports superior returns
through continued capital discipline SHAREHOLDER RETURNS AND
CAPITAL DISCIPLINE Enhanced portfolio of high return growth options
DEVELOPMENT OPTIONALITY Increased capacity to deliver the energy
transition ENERGY TRANSITION LEADERSHIP Opportunities to deliver
ongoing attractive synergies SYNERGIES AND VALUE CREATION
19
International
portfolio of Tier 1 assets Senegal Sangomar ~ 200 MMboe 1 2021
production 2 Top 10 independent East coast Australia Houston Bass
Strait 10.6 Mt 3 LNG production Gulf of Mexico Shenzi | Wildling |
Atlantis | 4 Top 10 global Mad Dog | Trion Scarborough FID Perth
achieved Attractive near-term Western Australia Trinidad &
Tobago GOM developments Scarborough | Pluto | North West Shelf |
Pyrenees | Angostura | Ruby | Calypso | Macedon | Wheatstone |
Ngujima-Yin | Okha T&T South 1. Combined Woodside and BHP for
the 12 months to 30 June 2021, not giving effect to any pro forma
adjustments. Includes Algeria production of 3 MMboe. Neptune
production volume is included in GOM but divested in May 2021. 2.
Source: Wood Mackenzie Corporate Benchmarking Tool production
forecasts as at 31 July 2021. Woodside analysis. 3. Equivalent to
95 MMboe. 20 4. Source: LNG Output, Wood Mackenzie LNG Tool, Q2
2020 data set. Woodside and BHP 12 months to 30 June 2021. Woodside
analysis.
Timeline
to completion Q3 2021 Q4 2021 Q1 2022 Q2 2022 17 August 22 November
Target for release of Target for Woodside shareholder Merger
commitment deed Share sale agreement and shareholder materials
meeting to approve issue of shares executed integration and
transitional services agreement executed Pursuing secondary
listings Target for completion date and on the New York Stock
distribution of new Woodside Exchange and London shares to BHP
shareholders Stock Exchange Due diligence Consents and approvals
Shareholder materials including independent expert’s report 1
Secondary listing identification Secondary listing implementation •
Woodside's and BHP Petroleum's respective businesses will remain
separate and independent until after completion 21 1. Final
implementation of secondary listings will occur around completion
of the merger.
Organisational design
after completion CEO Marketing Exploration Australia International
and and New Energy Operations Operations Trading Development
Strategy Technical Business Finance and Projects Services Services
Climate 22
Planning
opportunities to deliver synergies after merger completion •
Implement existing activities already identified by Operations
Transform initiatives and identify opportunities for broader
implementation after completion • Potential to improve inventory
management and consolidation of contracts OPERATIONS • Implement
best practices from the joint portfolio • Prioritise the highest
return options GROWTH OPPORTUNITIES • Explore opportunities for
supply services synergies across projects $400+ million • Focus on
high-quality prospects 1 estimated annual savings EXPLORATION •
Prioritising activities with a clear path to commercialisation •
Explore leveraging increased scale to improve shipping utilisation
and MARKETING increase optimisation opportunity • Potential to
rationalise applications, licences and subscriptions CORPORATE•
Alignment of systems and processes across portfolio • Optimise
organisational design for the merged business 23 1. Estimated
savings expected to be fully realised from approximately the end of
2023.
Scarborough and Pluto
Train 2 developments approved DEVELOPS WORLD-CLASS RESOURCE
Scarborough floating production unit Pluto platform 11.1 Tcf 957
MMboe 1,433 MMboe 8 Mtpa of LNG 3 increase to 1P reserves
development plus increase to 2P reserves resource size, 100% 225
TJ/day domestic gas PROVIDES LONG-TERM RETURNS Pluto LNG Pluto
Train 2 >13.5 % ~$5.8 per MMBtu ~6 years ~$26 billion 1 1 1
expected net cash flow globally competitive cost internal rate of
return payback period Domestic gas 1 of supply infrastructure
Approved Pluto-KGP Existing Interconnector 2 $6.9 billion Woodside
capital cost | 73.5% offshore, 51% onshore Targeting first cargo
2026 1. IRR, Woodside cost of supply and payback period assume
Woodside equity of 73.5% in Scarborough, 51% in Pluto Train 2 and
90% in Pluto LNG; includes Global Infrastructure Partners (GIP)
additional funding of $822m of capital expenditure from the sell-
down of Pluto Train 2 and payments due on FID to ExxonMobil and
BHP. IRR and payback period are a look forward from January 2021
and assume US$65/bbl (real terms 2022) Brent oil price. The
integrated Woodside cost of supply (real terms 2021) is based on a
10% rate of return (both upstream and downstream), includes
shipping to north Asia and is a look forward from January 2020.
Payback period is calculated from undiscounted cash flows, RFSU +
approximately 6 years. Not guidance. 2. Includes GIP’s additional
funding of $822m of capital expenditure from the sell-down of Pluto
Train 2 and excludes contingent payments due on FID. 24 3. 11.1
Tcf, 100% is consistent with the 2P reserves of 1,433 MMboe, a
working interest of 73.5% and a conversion factor of 5.7 Bcf per
MMboe.
Scarborough’s role in
the energy transition LNG is required Scarborough is advantaged
Woodside’s net zero aspiration 1 in a decarbonising world from a
carbon perspective includes Scarborough tCO -e/ LNG can assist
coal-to-gas 2 t LNG ~0.1 % ~0.26 switching in Asia Net zero Train 2
design intensity CO in reservoir 15% 2 30% aspiration by by 2025 by
2030 2050 Aligned with our customers’ Estimated total project
emissions (mt CO -e, full life) 2 decarbonisation goals 4
Woodside’s equity emissions reduction targets Scope 1 (upstream and
99.5 downstream) Scarborough is amongst the Scope 3 (use of sold
product 778.5 Contributes cash flow to help and transport) lowest
carbon intensity fund investment in the energy projects for LNG
delivered to 2 3 transition north Asia Total Scope 1 and 3
emissions 878.0 1. Relative to the reservoir CO content and design
intensity of other LNG projects. 2 2. Scarborough gas processed
through Pluto Train 2. 3. Scarborough Offshore Project Proposal;
includes Scarborough, Thebe and Jupiter. 100% project. 4. Target is
for equity net Scope 1 and 2 emissions. Baseline is set as the
gross average equity Scope 1 and 2 emissions over 2016-2020 and may
be adjusted (up or down) for potential equity changes in producing
or sanctioned assets with an FID prior to 2021. 25 Post-completion
of the Woodside and BHP petroleum merger (which remains subject to
conditions including regulatory approvals), the baseline will be
adjusted for the then combined Woodside and BHP petroleum
portfolio.
Sangomar
progress SUBSEA Umbilical on carousel Inline structure sliding
frame Assembled inline structure FPSO CONVERSION DALIAN Turret
support Living quarters Turret support structure structure
integration 26
Sangomar
progress SENEGAL FPSO TOPSIDES – TIANJIN FPSO TURRET – PENGLAI
Medium pressure gas compression Chain table support system coating
Liquid mud plant topsides assembly completed Electrical house
Turret head system coating Sumitomo tubular yard 27
Key
messages Thriving through the energy transition STRATEGY CAPITAL
ALLOCATION Clear criteria for maximising value from portfolio
optionality SHAREHOLDER RETURNS Flexible framework for distributing
value to shareholders Corporate emissions reduction targets
applying to the larger portfolio; CLIMATE investment target for new
energy products and lower carbon services to 2030 Diversified new
energy portfolio NEW ENERGY Planning and scoping underway for
integration after completion MERGER AND DEVELOPMENTS 28
Additional
information for US investors No offer or solicitation Disclosure of
reserve information and cautionary note to US investors • This
presentation includes information relating to the proposed
Transaction between Woodside and BHP. • Unless expressly stated
otherwise, all estimates of oil and gas reserves and contingent
resources disclosed in This presentation is not intended to and
does not constitute an offer to sell or the solicitation of an
offer to this presentation have been prepared using definitions and
guidelines consistent with the 2018 Society of subscribe for or buy
any securities or a solicitation of any vote or approval with
respect to the Transaction or Petroleum Engineers (SPE)/World
Petroleum Council (WPC)/American Association of Petroleum
Geologists otherwise, nor shall there be any offer, solicitation or
sale of securities in any jurisdiction in which such offer,
(AAPG)/Society of Petroleum Evaluation Engineers (SPEE) Petroleum
Resources Management System (PRMS). solicitation under the
securities laws of any such jurisdiction. No offer of securities in
the United States shall Estimates of reserves and contingent
resource in this presentation will differ from corresponding
estimates be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of prepared in
accordance with the rules of the US Securities and Exchange
Commission (the “SEC”) and 1933. disclosure requirements of the US
Financial Accounting Standards Board (“FASB”), and those
differences may be material. Important additional information •
Estimates of contingent resources are by their nature more
speculative than estimates of proved reserves • In connection with
the proposed Transaction, Woodside intends to file with the US
Securities and Exchange and would require substantial capital
spending over a significant number of years to implement recovery.
Commission (the “SEC”) a registration statement on Form F-4 (the
“Registration Statement”) to register the Actual locations drilled
and quantities that may be ultimately recovered from our properties
will differ Woodside securities to be issued in connection with the
proposed Transaction (including a prospectus substantially. In
addition, we have made no commitment to drill, and likely will not
drill, all of the drilling therefor). Woodside and BHP also plant o
file other documents with the SEC regarding the proposed locations
that have been attributable to these quantities. Transaction. This
presentation is not a substitute for the Registration Statement or
the prospectus or for any • The Registration Statement to be filed
in connection with the Transaction will be required to include,
among other documents that Woodside or BHP may file with the SEC in
connection with the Transaction. US other things, disclosure of
reserves and other oil and gas information in accordance with U.S.
federal INVESTORS AND US HOLDERS OF WOODSIDE AND BHP SECURITIES ARE
URGED TO READ THE securities laws and applicable SEC rules and
regulations (collectively, “SEC requirements”). The SEC permits
REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS RELATING TO
THE PROPOSED oil and gas companies that are subject to domestic
issuer reporting requirements under U.S. federal TRANSACTION
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS) THAT
WILL securities law, in their filings with the SEC, to disclose
only estimated proved, probable and possible reserves BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE that meet the SEC’s definitions of such terms. In addition,
the Registration Statement will include notes to THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT WOODSIDE, BHP AND THE TRANSACTION. the
financial statements included therein that include supplementary
disclosure in respect of oil and gas Shareholders will be able to
obtain free copies of the Registration Statement, prospectus and
other activities, including estimates of proved oil and gas
reserves and a standardized measure of discounted documents
containing important information about Woodside and BHP once such
documents are filed with future net cash flows relating to proved
oil and gas reserve quantities. This supplementary financial the
SEC, through the website maintained by the SEC at
http://www.sec.gov. Copies of such documents may statement
disclosure will be presented in accordance with FASB requirements,
which align with also be obtained from Woodside and BHP without
charge. corresponding SEC requirements concerning reserve
estimation and reporting. 29
Head
Office: Woodside Petroleum Ltd Mia Yellagonga 11 Mount Street Perth
WA 6000 Postal Address: GPO Box D188 Perth WA 6840 Australia T: +61
8 9348 4000 F: +61 8 9214 2777 E: companyinfo@woodside.com.au
Woodside Petroleum Ltd ABN 55 004 898 962
woodside.com.au
Forward-looking statements
This announcement contains forward-looking statements. The words
‘anticipate’, ‘believe’, ‘aim’, ‘estimate’, ‘expect’, ‘intend’,
‘may’, ‘target’, ‘plan’, ‘forecast’, ‘project’, ‘schedule’, ‘will’,
‘should’, ‘seek’ and other similar words or expressions are
intended to identify forward-looking statements. These
forward-looking statements are based on assumptions and
contingencies that are subject to change without notice and involve
known and unknown risks, uncertainties and other factors, many of
which are beyond the control of Woodside, BHP and their respective
related bodies corporate and affiliates (and each of their
respective directors, officers, employees, partners, consultants,
contractors, agents, advisers and representatives), and could cause
results, performance or achievements to be materially different
from the results, performance or achievements that are or may be
expressed or implied by those forward-looking statements or any
projections or assumptions on which those statements are based.
The forward-looking statements are subject to risk factors,
including those associated with the oil and gas industry as well as
those in connection with the Transaction. It is believed that the
expectations reflected in these statements are reasonable, but they
may be affected by a range of variables which could cause actual
results or trends to differ materially, including but not limited
to: price fluctuations, actual demand, currency fluctuations,
geotechnical factors, drilling and production results, gas
commercialisation, development progress, operating results,
engineering estimates, reserve estimates, loss of market, industry
competition, environmental risks, physical risks, legislative,
fiscal and regulatory developments, economic and financial markets,
conditions in various countries, approvals and cost estimates.
Investors are strongly cautioned not to place undue reliance on
forward-looking statements, particularly in light of the current
economic climate and the significant uncertainty and disruption
caused by the COVID-19
pandemic. Forward-looking statements are provided as a general
guide only and should not be relied on as an indication or
guarantee of future performance. These statements may assume the
success of the Transaction, BHP’s oil and gas portfolio or
Woodside’s business strategies, the success of which may not be
realised within the period for which the forward-looking statements
may have been prepared, or at all. No guarantee, representation or
warranty, express or implied, is made as to the accuracy,
likelihood of achievement or reasonableness of any forecasts,
prospects, returns, statements or tax treatment in relation to
future matters contained in this presentation.
Past performance and pro forma historical information is given for
illustrative purposes only. Pro forma information is presented on a
combined basis, without giving effect to any pro forma adjustments.
It should not be relied on and is not indicative of future
performance, including future security prices.
Disclosure of reserve information and cautionary note to US
investors
Unless expressly stated otherwise, all estimates of oil and gas
reserves and contingent resources disclosed in this presentation
have been prepared using definitions and guidelines consistent 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). Estimates of reserves and
contingent resource in this presentation will differ from
corresponding estimates prepared in accordance with the rules of
the US Securities and Exchange Commission (the “SEC”) and
disclosure requirements of the US Financial Accounting Standards
Board (“FASB”), and those differences may be material. For
additional information regarding the availability of Woodside’s
reserves disclosures in accordance with SEC requirements, please
see Woodside’s investor presentation dated 17 August 2021 and
released to the ASX. For additional information regarding BHP’s
reserves, please see BHP’s annual report on Form 20-F filed with the SEC.
No offer or solicitation
This communication relates to the proposed Transaction between
Woodside and BHP. This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to
subscribe for or buy any securities or a solicitation of any vote
or approval with respect to the Transaction or otherwise, nor shall
there be any offer, solicitation or sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities in
the United States shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act
of 1933.
Important additional information and where to find it
In connection with the proposed Transaction, Woodside intends to
file with the US Securities and Exchange Commission (the “SEC”) a
registration statement on Form F-4 (the “Registration Statement”) to
register the Woodside securities to be issued in connection with
the proposed Transaction (including a prospectus therefor).
Woodside and BHP also plan to file other documents with the SEC
regarding the proposed Transaction. This communication is not a
substitute for the Registration Statement or the prospectus or for
any other document that Woodside or BHP may file with the SEC in
connection with the Transaction. US INVESTORS AND US HOLDERS OF
WOODSIDE AND BHP SECURITIES ARE URGED TO READ THE REGISTRATION
STATEMENT, PROSPECTUS AND OTHER DOCUMENTS RELATING TO THE PROPOSED
TRANSACTION (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS TO THOSE
DOCUMENTS) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT WOODSIDE, BHP AND THE PROPOSED
TRANSACTION. Shareholders will be able to obtain free copies of the
Registration Statement, prospectus and other documents containing
important information about Woodside and BHP once such documents
are filed with the SEC, through the website maintained by the SEC
at http://www.sec.gov. Copies of such documents may also be
obtained from Woodside and BHP without charge.
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