Woodside guides to 20% higher oil output in 2023; shares slump

Woodside (ASX: WDS) has provided investors with guidance for what to expect in 2023, including costs, production, gas exposure and sales forecasts.

The outlook appears to have fallen short of market expectations, with Woodside shares down -4.9% in early trade.

2023 Guidance: Output and capex boost

Production: Woodside guided to 180-190 million barrels of oil equivalent (MMboe). This represents a 19.4% (midpoint) increase against the company's 2022 full-year guidance of 153-157MMboe.

The production guidance assumes:

• Sangomar Field Development Phase 1 is expected to hit first production in late 2023 but no contribution is included in 2023 forecasts

• Mad Dog Phase 2 is undergoing commissioning and forecast to come online in mid-2023

• Pluto LNG has a major turnaround planned for 2Q23 and expected to last approximately four weeks

To add some perspective, Woodside's production in the third quarter of 2022 was 51.2MMboe, up 52% compared to the prior quarter. The jump in production reflected the first full three months of contribution from the former BHP petroleum business.

Production breakdown: Woodside expects the following split by product type.

Source: Company data | Table: Market Index

Capital expenditure: Full-year 2023 capital expenditure is forecast to be between US$6.0bn to $6.5bn compared to 2022 guidance of US$4.0bn to US$4.3bn. At the midpoint, this represents a 48% increase.

Gas hub exposure: Woodside expects approximately 20-25% of its 2023 produced LNG to be sold at prices linked to gas hub indices. This percentage is unchanged compared to 2022 expectations.

Woodside share price chart (Source: TradingView)