The Woodside Energy Group Ltd (ASX: WDS) share price was a strong performer during the first six months of 2022. So, can the company do it again in the next six months?
A lot has happened over the last 12 months for the oil and gas giant. It may not be a surprise that Woodside shares have gone up by around 30% over the past year.
As Australia's biggest ASX oil and gas share, changes in commodity prices can have sizeable impacts on what happens to a company's profit and investor sentiment. Energy prices jumped after the Russian invasion of Ukraine.
However, a business can achieve things operationally that can also help.
Let's look at one of the biggest changes that has happened to the business recently, which will have a significant impact on the following months (and years).
Image source: Getty Images
Merger with BHP business
As a result of the merger between Woodside and BHP's oil and gas business, Woodside is now a top 10 global energy company by hydrocarbon production and the largest listed energy company on the ASX.
Woodside expects the larger, more diversified portfolio to deliver "significant cash flow to help fund committed projects, Woodside's participation in the energy transition and shareholder returns".
The ASX oil and gas business has started activities to integrate the two organisations.
Woodside's CEO Meg O'Neill said that completing this merger was one of the most significant events in the company's 67-year history:
The merger delivers a diverse portfolio of quality operating assets, plus a suite of growth opportunities across oil, gas and new energy that promises ongoing value for our shareholders.
We believe the completion of the merger will enable Woodside to play a more significant role in the energy transition that is imperative as we respond to climate change while ensuring reliable and affordable supplies of energy to a growing and aspirational global population.
We are focused on unlocking pre-tax annual synergies of more than $400 million as we merge the two businesses.
Those synergies alone could be quite beneficial for the Woodside share price.
Projects
Woodside continues to make progress on projects that can help grow profit in the future.
For example, it said that in the first three months of FY22 work on the Scarborough and Pluto Train 2 projects began to ramp up, with Bechtel (the engineering, procurement, construction and commissioning contractor for Pluto Train 2) beginning major civil works.
Manufacture of the Scarborough pipeline has also commenced.
Progressing and completing these projects could be helpful for the Woodside share price over the rest of 2022 and beyond.
Broker ratings on the Woodside share price
A price target is where a broker has estimated a share price will be in 12 months from that date.
UBS recently upgraded its rating on Woodside to a buy, with a price target of $34.25. That implies a possible upside of around 10%.
However, Macquarie is neutral on Woodside with a price target of just $29.25, implying a mid-single-digit decline.
Citi is also neutral on the business, though the price target is $33.40. That suggests a possible mid-single-digit rise.
