Woodside Energy (ASX:WDS) makes final investment decision for Trion development, Mexico

• Woodside Energy (WDS) makes a final investment decision to develop its high-quality Trion resource in the Gulf of Mexico
• The forecasted total capital expenditure for the development is US$7.2 billion (A$10.5 billion)
• The giant is targeting an estimated 479MMboe of oil and gas, with first oil aimed for 2028
• Woodside announced that its greenhouse gas emissions reduction targets remain unchanged by the final investment decision
• WDS shares are up 2.29 per cent and trading at $36.34 at 1:40 pm AEST

Woodside Energy (WDS) has made a final investment decision to develop its high-quality Trion resource in the Gulf of Mexico.

The company reported that the forecasted total capital expenditure for the development would be US$7.2 billion (A$10.5 billion).

Woodside is targeting an estimated 479 million barrels of oil equivalent (MMboe) of oil and gas, with first oil aimed for 2028.

The resource will be developed through a floating production unit (FPU) with an oil production capacity of 100,000 barrels per day, and a storage capacity of 950,000 MMboe.

The development is subject to joint venture and regulatory approvals of WDS’s field development plan (FDP), which is expected to be complete by Q4 2023.

The investment is expected to deliver an internal rate of return (IRR) of greater than 16 per cent, with a payback period of less than four years.

“The investment is aligned with Woodside’s strategy, exceeds Woodside’s capital allocation framework targets and will be a strong contributor to Woodside’s cash flows, shareholder returns and the funding of future developments in oil, gas and new energy,” Woodside CEO Meg O’Neill said.

“This development leverages Woodside’s proven expertise in deepwater project execution, and the project’s tendering process has resulted in approximately 70 per cent of total forecast capital expenditure as lump sum or fixed rates, with key contracts to be progressively executed following joint venture approval.”

The Trion resource was discovered by joint venture partner Pemex in 2012 and resides roughly 180 kilometres off the Mexican coastline to a depth of 2500 metres. WDS holds an operating interest of 60 per cent, while Pemex holds the remaining 40 per cent stake in the venture.

Woodside announced that its greenhouse gas emissions reduction targets would remain unchanged by the final investment decision.

WDS shares were up 2.29 per cent and trading at $36.34 at 1:40 pm AEST.