Woodside expects $1.5bn impairment in 2023

Australia's Woodside on February 15 said it anticipates recognising approximately $1.5bn in asset impairments for the 2023 fiscal year.

The significant portion of this impairment, approximately $1.2bn, is related to the Shenzi asset, acquired as part of the 2021 merger with BHP Group's petroleum division. Shenzi represented approximately 5% of Woodside's 2023 production and 2% of year-end proved plus probable reserves.

Shenzi project in the Gulf of Mexico was discovered in 2002 and the first production of oil and natural gas occurred in 2009. 

Woodside expects a non-cash post-tax impairment of approximately $300mn for Wheatstone in its 2023 full-year financial statements. This impairment is mainly related to short-term pricing issues.

Meanwhile, Woodside said it added 266mm boe of proved oil and gas reserves in 2023, replacing 132% percent of production, and 318mm boe of proved plus probable reserves, replacing 158% of production.

As of December 2023, Woodside’s remaining proved (1P) reserves were 2,450.1mm boe, proved plus probable (2P) reserves remaining were 3,757.1mm boe. The best estimate (2C) contingent resources remaining were 5,902mm boe.

The first-time booking of reserves at Trion in Mexico and Mad Dog Southwest in the US Gulf of Mexico increased proved reserves by 204.1mm boe and proved plus probable reserves by 300mm boe.

Revisions of previous estimates and transfers in 2023 resulted in a net increase of 61.8mm boe for proved reserves, and 17.8mm boe for proved plus probable reserves. This includes improved performance and technical updates at North West Shelf and Pluto, offset by a 13.4mm boe proved reserve, and a 30.2mm boe proved plus probable reserve, reduction at Shenzi.

The reduction in reserves at Shenzi are mainly associated with the performance of infill sidetracks and performance of the Shenzi North development following start up.