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HOUSTON - Woodside Energy Group Ltd. (Market cap: $24.8 billion), a company currently trading at an attractive P/E ratio of 6.94 and maintaining strong annual revenues of $13.18 billion, has decided to move forward with the development of a major liquefied natural gas (LNG) project in Louisiana, marking a significant investment in the sector. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimates. The company announced on Monday that it had made a final investment decision to develop the Louisiana LNG project, which includes three processing trains and an annual capacity of 16.5 million tonnes.
The project, with a total expected capital expenditure of $17.5 billion, is anticipated to start producing LNG in 2029. Woodside’s CEO, Meg O’Neill, described the decision as an "historic moment" for the company, positioning it to become a leading player in the global LNG market. The company’s solid financial foundation is reflected in its "GOOD" overall health score from InvestingPro, which offers comprehensive analysis through its Pro Research Report, one of 1,400+ detailed company assessments available to subscribers. The development is projected to increase Woodside’s global LNG portfolio to approximately 24 million tonnes per annum in the 2030s, representing over 5% of the worldwide LNG supply.
Stonepeak, an investor in Louisiana LNG Infrastructure LLC, will contribute $5.7 billion towards the project’s capital expenditure, covering 75% of the costs in both 2025 and 2026. Woodside’s share of the forecasted expenditure is $11.8 billion.
The Louisiana LNG project is expected to generate about $2 billion in annual net operating cash at full capacity in the 2030s, contributing to Woodside’s goal of over $8 billion in annual net operating cash from its global portfolio during the same period. The company has demonstrated its commitment to shareholder returns with a substantial 7.82% dividend yield and a 34-year track record of consecutive dividend payments, as reported by InvestingPro. The project’s internal rate of return is projected to exceed 13%, with a payback period of seven years.
Woodside has emphasized that its greenhouse gas emissions reduction targets will remain unchanged despite the investment in Louisiana LNG. The company maintains a commitment to a 30% reduction in net equity Scope 1 and 2 greenhouse gas emissions by 2030 and aspires to achieve net-zero emissions by 2050 or sooner.
The CEO highlighted the strategic advantages of the project, including access to low-cost gas resources in the United States, a lifespan of over 40 years, and the potential to meet LNG demand in both Asia and Europe. The Louisiana LNG project is also notable for being the largest single foreign direct investment in Louisiana’s history and the first greenfield US LNG project to reach a final investment decision since July 2023.
Woodside’s announcement is based on a press release statement and comes ahead of a teleconference scheduled for today, where CEO Meg O’Neill will provide further details and address questions regarding the development.
In other recent news, Woodside Energy Group Ltd has released its first-quarter earnings for 2025, providing insights into its operational and financial performance. The company filed its report with the U.S. Securities and Exchange Commission, detailing production volumes and financial metrics. Additionally, Woodside has signed multiple liquefied natural gas (LNG) supply agreements with Uniper, which are expected to enhance its revenue streams and secure long-term sales contracts. In a strategic move, Woodside announced a partnership with investment firm Stonepeak to develop an LNG project in Louisiana, indicating its commitment to expanding its global LNG operations. Stonepeak has acquired a 40% stake in the Louisiana LNG Infrastructure LLC, with Woodside continuing to operate the facility. The transaction is expected to close in the second quarter of 2025, pending necessary approvals. Meanwhile, Woodside has addressed media speculation in a recent SEC filing, affirming its compliance with regulations and providing clarity on its business operations. These developments highlight Woodside’s efforts to strengthen its position in the energy sector while focusing on sustainable growth.
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