The ASX energy sector was one of the weakest parts of the market in June

The ASX energy sector was one of the weakest parts of the market in June as even high-quality companies such as Woodside Energy and Santos had considerable share price declines. 

Brent crude dropped from around US$95 per barrel at the beginning of June to approximately US$73 per barrel by month end as peace negotiations between the United States and Iran and a partial reopening of the Strait of Hormuz eased concerns over global supply disruptions.

Woodside Energy Group Limited (ASX: WDS)

Woodside Energy Group Limited (ASX: WDS) is one of best energy producers in Australia but the decline in energy prices in June 2026 was reflected its share price as it fell 8% during June 2026. It performed much better than many smaller ASX 200 energy peers while current annual fully franked dividend yield is an attractive 5.90% and market capitalisation is US$53.29 billion.

The company in the first quarter of 2026 reported resilient operating performance with operating revenue of US$3.26 billion.

Average realised prices increased 11% from the previous quarter to US$63 per barrel of oil equivalent while sales volumes rose 3% from the prior corresponding period despite temporary weather-related production disruptions.

The company's recent progress was impressive because the Scarborough Energy Project reached 96% completion and remained on schedule for its first LNG cargo in Q4 2026.

The Trion Project reached 56% completion while Louisiana LNG stayed on budget and Beaumont New Ammonia successfully shipped its first ammonia cargo.

The company also demonstrated the quality of its asset base because Sangomar Shenzi Pluto LNG and the North West Shelf Project all achieved reliability of around 99% or better which will support long-term production and cash flow stability.

Management also reaffirmed full year 2026 production guidance of 172 to 186 MMboe while it maintained all major capital expenditure and operating cost guidance.

Santos Limited (ASX: STO)

Santos Limited (ASX: STO) is among Australia's major energy producers and its share price fell by 7.7% during June while current annual unfranked dividend yield is 4.89% and market capitalisation is $23.09 billion.

The company in the first quarter of 2026 reported disciplined operational results as production rose 3% from the prior corresponding period to 22.5 mmboe while sales revenue reached US$1.27 billion and free cash flow from operations was approximately US$383 million.

Operational performance also improved across several key assets as Barossa shipped its first LNG cargoes while PNG LNG maintained plant reliability above 98% and GLNG increased upstream production. 

Another important milestone came with the start of continuous production at the Pikka Phase 1 oil project in Alaska where initial production of around 20,000 barrels per day has started. The company is targeting plateau production of approximately 80,000 barrels per day during the third quarter of 2026.

Santos also expanded its Australian energy business after signing a 10-year agreement to supply 200 petajoules of gas to the South Australian Strategic Gas Reserve from 2030. 

The company is focused on developing its tier one oil and LNG assets while targeting 2026 production of 101 to 111 mmboe and capital expenditure of around US$1.95 billion to US$2.15 billion. It also expects to maintain low unit production costs of US$6.95 to US$7.45 per boe.

Management expects Barossa and Pikka to become major free cash flow drivers. It also aims to return at least 60% of free cash flow to shareholders and reduce net debt by approximately US$2.5 billion by 2030 which would improve the balance sheet.

(Source: Company Announcements)