1H23 results from the Oil & Gas company were slightly lower than expected yesterday across most metrics, although net profit after tax (NPAT) of $801m was aligned with consensus driven by a more favourable tax benefit (making it lower quality). Higher LNG plant and pipeline costs were evident while distributions were below their guided range. They have a target of 40% of free cash flow (FCF) via distributions and share buy-backs and with a dividend equating to a 25% payout yesterday there is an expectation they will do more later in the year, incorporating a buy-back. More details to come on their PNG LNG sell-down are expected in the next week with a range of outcomes possible, making it hard to guess.
- A reasonable result although some swings and roundabouts for STO.
We prefer WDS over STO for energy exposure
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