Woodside Energy Group Ltd (ASX:WDS) shares have declined ~5% in the last one week. This Company’s stock has delivered a significant return of over 72% in the last 1 year, driven by the solid 1H FY2022 results and the strategy executed by the Company during this period.

However, the weak performance of the energy sector, along with the recent announcement from the Company made WDS shares drop in the last week.

This article will look into all these factors in detail and identify the factors influencing the share price.

Weak Performance of the Energy Sector:

The energy sector has delivered a negative return of ~2% in the last 5 days. One of the factors influencing the sector’s performance in the previous 5 days was the drop in oil prices. Last week, the international Brent Crude futures declined by around 4.5% due to China’s rise in COVID-19 cases. China is the biggest importer of oil in the world, and the increase in COVID-19 cases has reduced the demand for oil in China. Experts assume further downward pressure for oil prices due to record daily new cases of COVID-19 in China.

Another reason that impacted the energy sector was the talks related to the possible price cap and the rise in the US product stockpile. Many market experts believe that the lack of strong fundamental triggers can limit the upside and keep the market volatile in the short term.

On 30 November 2022, oil prices improved on lower US crude stock but concerns OPEC+ will leave the output at its upcoming meeting coupled with China concerns might limit gains.

FY2023 Guidance:

Besides the above reasons, WDS shares slipped following the release of the FY2023 guidance. The Company completed the review of its 2023 corporate plan, comprising cost, production, and sales forecasts. Based on the review, Woodside announced its FY2023 guidance.

In FY2023, it expects production in the range of 180 million to 190 million barrels of oil equivalent. In Q3 FY2022, the Company delivered record production of 51.2 MMboe, up 52% from Q2 FY2022. In 1H FY2022, the Company delivered a production of 54.9 MMboe. It expects to achieve production between 145 – 153 MMboe.

Based on the production numbers achieved in 1H FY2022 and Q3 FY2022, it might be possible that investors expect a better production guidance range. Further, the Company pointed out that Sangomar Field Development Phase 1 targets the first oil in late 2023. Mad Dog Phase 2 is undergoing commissioning. The Company expects production guidance purposes for a start-up in mid-2023.

Resignation of Executive Vice President:

Another major update Woodside released this week was the resignation of its Executive Vice President Australian Operations, Ms. Fiona Hick, to pursue a career opportunity with Fortescue Metals Group Ltd (ASX:FMG).

Fiona demonstrated exceptional vision and leadership in her many roles at Woodside. Since 2019, she has been a valuable team member in the executive team. She has been active in delivering safe, reliable, low-cost, and lower-carbon performance.

Stock Performance:

At AEDT 1:43 PM, WDS shares are trading at AU$36.570, down 1.930% from the previous close. 

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