Key Updates
Woodside Energy fell 5.29% to $15.41 since the last report, continuing its correction after the cancellation of a large M&A deal in the sector. The collapse of ADNOC’s $18.7 billion offer to buy Santos sparked negative sentiment in the Australian energy space, even though Woodside secured a key approval to extend the North West Shelf project to 2070.
Current Trend
The stock is in steady decline: down 4.76% today, 7.39% this week and 7.17% this month. Year-to-date performance remains mildly negative at –1.22%, indicating sideways consolidation in the medium term. The 6.20% half-year gain is gradually eroding under the current correction.
Investment Thesis
Woodside’s long-term strategy hinges on expanding its LNG portfolio and diversifying assets. The company is strengthening its position through strategic supply contracts and approvals to extend key projects, providing cash-flow visibility for decades ahead.
Thesis Status
The investment thesis remains intact thanks to the company’s fundamental progress. The approval to extend NWS to 2070 bolsters the long-term asset base, despite short-term pressure from sector sentiment after the Santos-ADNOC deal fell apart.
Key Drivers
The main positive catalyst was the approval to extend the North West Shelf project to 2070 with 48 strict conditions. A negative influence came from the collapse of the $18.7 billion ADNOC-Santos deal, which created uncertainty in M&A and trimmed valuation premiums for Australian energy companies.
Technical Picture
The $15.41 price sits in a short-term downtrend after breaking below $16.00. The current pullback is unfolding within a broader 2025 sideways pattern. Key support is around $15.00; a break below could lead to testing of annual lows.
Bull Case
- Approval to extend the North West Shelf project to 2070 provides long-term revenue visibility – source
- Strategic 15-year supply agreement with Petronas for 1 million tonnes of LNG per year strengthens the contract base (from prior analysis)
- 2024 production forecast raised to 190-200 million barrels of oil equivalent, showing operational efficiency (from prior analysis)
- Half-year growth of 6.20% demonstrates fundamental business resilience
- Low interest in the Trinidad and Tobago block auction could reduce competition for assets – source
Bear Case
- Collapse of the ADNOC-Santos deal creates negative sentiment in the Australian energy sector and reduces valuation premiums – source
- Steady price decline of 7.39% over the week and 7.17% over the month points to a technical bearish trend
- Negative YTD performance of –1.22% shows weakness relative to the market
- Disagreements over commercial terms in the Santos deal highlight M&A challenges – source
- The 48 strict conditions for extending NWS could impose operational constraints – source