In a surprising turn of events, Woodside Energy has outperformed expectations for its fourth-quarter revenue, even in the face of a significant decline in oil prices. However, the company is now bracing for a decrease in production for 2026. This development has sparked considerable interest among analysts and investors alike, as it highlights the complexities of the energy market.
On January 28, 2026, reports emerged from Reuters detailing that Woodside, based in Australia, recorded a remarkable revenue performance during the December quarter, defying the anticipated downturn attributed to falling oil and gas prices. The company’s shares saw an increase of up to 2.53%, reaching $24.93 by 0424 GMT, contrasting with a slight dip of 0.22% in the broader market index.
One of the standout achievements for Woodside was its record-breaking output of 198.8 million barrels of oil equivalent (boe) for the year, surpassing earlier production guidance. This impressive figure was driven by robust operational efficiency at key assets like Sangomar, Shenzi, and Pluto LNG, which helped mitigate the impact of the lowest oil prices seen since 2020.
Analysts from Jarden and MST Marquee praised the results, labeling them as "strong." Nik Burns from Jarden pointed out that while the new production forecasts for 2026 suggest a reduction, they still remain about 3% below the consensus midpoint projections, which range from 172 million to 186 million boe. This adjustment can be attributed to scheduled maintenance and a significant overhaul at the Pluto LNG facility planned for the second quarter, along with the timing for new outputs from the Scarborough project.
Interestingly, Burns also noted a pattern: last year, Woodside provided guidance that fell short of consensus expectations but subsequently revised it upward twice, ultimately exceeding its highest forecast. "We suspect the market might anticipate a similar scenario unfolding this time, which could lead to a positive reception," he remarked in an email.
Liz Westcott, serving as Woodside's interim CEO, highlighted that the quarterly results benefitted from stable production levels at the Sangomar oil field off the coast of Senegal and the efficient operation of the Pluto LNG project, which maintained full capacity throughout the latter half of 2025. "Recently, we celebrated a significant achievement with the Scarborough Energy Project, marking the safe arrival of the floating production unit and the initiation of hook-up activities. As of the year's end, the project was 94% complete and remains on track and within budget for its first LNG shipment anticipated in Q4 2026," she stated, updating the previous market expectation for an earlier cargo delivery in the third quarter.
It's worth noting that Meg O’Neill departed from Woodside mid-December to take a leadership role at BP, leaving the company without a permanent CEO. However, analysts have identified Westcott as one of three strong internal candidates for the position.
Kavonic echoed Burns' sentiments regarding the potential for Woodside to exceed its production estimates this year, suggesting that the company is now on a more stable path toward growth. "This strong performance underscores Woodside's shift toward providing more conservative production guidance," he noted in his analysis.
Additionally, the company confirmed that it commenced its first ammonia production at the Beaumont New Ammonia project in December, with commissioning processes expected to continue into early 2026.
As Woodside navigates these challenges and opportunities, the energy sector is keenly watching how these developments unfold. How do you interpret Woodside's approach to production guidance? Do you think they will exceed expectations again, or is a cautious outlook warranted? Share your thoughts in the comments!
