“Woodside (WDS) has successfully delivered first oil at the Sangomar field, Senegal’s first offshore oil project,” Raymond said.
“This is an impressive execution from Woodside, landing approximately 1,500 metre long laterals within reservoir despite the complex geology at Sangomar.
“The accurate geo-steering on display increases our confidence that WDS can execute on exploiting the larger S400 sands.
“Although we are still waiting for critical data from the pilot in the S400, which will test connectivity between the injector and producer wells, which will be key to determining how much oil in place can ultimately be recovered.
“Echoing comments from Senegal’s new President in the media, Woodside management maintained a positive working relationship and expectation for its agreed fiscal terms being maintained around Sangomar.
“We maintain our increased conviction in the long-term value we see on offer in Woodside following the selling pressure its share price has come under in 2024.
“While some risks remain around late-stage delivery of its important Scarborough/Pluto T2 project, we see this risk as outsized by the valuation buffer currently implied by Woodside’s current share price.
“Fast forward 12 months and we expect the outlook to focus on declining capex, a solid balance sheet, strong dividend profile, and increased confidence in oil and LNG markets.
“We maintain our ADD rating with an unchanged A$36 per share target price,” Raymond said.
Woodside (WDS)
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