Why is the Woodside share price beating the ASX 200 today?

Woodside has given the thumbs up to a major development.

| More on:
A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Woodside Energy Group Ltd (ASX: WDS) share price is rising on Tuesday.

In morning trade, the energy producer's shares are up almost 1.5% to $35.97 despite a pullback in oil prices overnight.

This compares favourably to a 0.3% gain by the ASX 200 index.

Why is the Woodside share price rising?

Investors have been bidding the Woodside share price higher today after the company released an update on the Trion resource in Mexico.

This is a highly promising resource in which Woodside has a 60% participating interest.

Today's update reveals that the Woodside board has given the thumbs up to develop the large, high-quality resource. It found that the Trion development has expected returns that exceed Woodside's capital allocation framework targets and deliver enduring shareholder value.

That's despite the development requiring a substantial investment. The release reveals that the forecast total capital expenditure is US$7.2 billion, with Woodside's share coming to US$4.8 billion.

But thanks to its 479 MMboe of best estimate (2C) contingent resource (100%) of oil and gas and oil production capacity of 100,000 barrels per day, the company expects the investment to deliver an internal rate of return (IRR) greater than 16% and a payback period of less than four years.

Woodside advised that the first oil will be targeted for 2028.

Woodside's CEO, Meg O'Neill, appears very positive on the potential of the Trion resource. She commented:

We are developing Trion because we believe it will deliver value for Woodside shareholders and benefit for Mexico, including generation of jobs, taxation revenue and social benefit. We value the ongoing relationship with PEMEX and the support of the Mexican Government and regulators.

ESG-friendly asset

Another positive is that the company believes that the asset is supportive of its ESG credentials. It states:

Woodside believes that Trion is resilient in a decarbonising world, because of several factors including its forecast short payback period of less than four years, the fact that two-thirds of the resource is expected to be produced within 10 years from start-up, portfolio free cash flow resilience in the IEA NZE scenario and it having an expected all-in breakeven less than US$50/bbl.8,9 Trion is expected to have a carbon intensity of 11.8 kgCO2-e/boe over the life of the field, below the global deepwater oil average of 15 kgCO2-e/boe and global oil average of 27 kgCO2-e/boe averaged over the period 2022 to 2032.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Energy Shares

Why are ASX uranium stocks rocketing today?

These shares are shining brightly on Friday. Let's find out why.

Read more »

Worker on a laptop at an oil and gas pipeline.
Energy Shares

Why the Woodside share price is looking cheap today

A leading fund manager believes Woodside shares have an “asymmetric skew to the upside”.

Read more »

Coal miner holding a giant coal rock in his hand making a circle with his hand, symbolising a rising share price.
Energy Shares

2 ASX 200 coal stocks to buy now despite tariff impact: Expert

Investors are nervous about the impact of US tariffs on global coal consumption.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Share Market News

US-China tariff deal sparks strong week for ASX 200

Energy shares ripped 5.77% higher while the ASX 200 lifted 1.37% over the five days.

Read more »

Coal miner standing in a coal mine.
Dividend Investing

Down 22% this year, does this ASX dividend share still offer investors a 10% yield?

There's a difference in trailing and forward dividend yields.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

What's moving the Woodside share price on Friday?

Here's the latest news from the ASX 200 oil and gas giant.

Read more »

Miner looking at a tablet.
Share Gainers

Up 93% since April should I still buy Boss Energy shares now?

Boss Energy shares, the most shorted on the ASX, have almost doubled in value in one month. Now what?

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Share Gainers

Boss Energy shares have rocketed 90% in a month. Here's why

The massive rally in Boss Energy shares will be painful to the host of short sellers betting against the uranium…

Read more »