Woodside Energy Group Ltd (ASX: WDS) shares are having a tough time on Thursday.

In morning trade, the energy giant's shares are down 5% to $22.89.

Why are Woodside shares sinking?

There have been a couple of catalysts for today's selling.

The first is another pullback in oil prices overnight which is weighing on the energy sector.

According to Bloomberg, the WTI crude oil price was down 3% to US$66.24 a barrel and the Brent crude oil price was down 2.5% to US$69.26 a barrel.

This was driven by concerns over a planned increase in production from OPEC in April, as well as US President Donald Trump's tariffs on Canada, China and Mexico.

What else?

Also weighing heavily on Woodside shares is the fact that they are trading ex-dividend this morning for its final dividend of FY 2024.

When this happens, it means that the rights to an upcoming dividend are locked in and new buyers will not be eligible to receive it. As a result, its shares have dropped to reflect this.

Last month, Woodside released its full year results and revealed a 6% decline in operating revenue to US$13.2 billion and a 13% reduction in underlying net profit after tax to US$2.9 billion.

This led to the Woodside board cutting its fully franked final dividend by 12% to 53 US cents per share, which reduced its full year dividend by 13% to 122 US cents per share.

It is the final dividend that Woodside shares are going ex-dividend for this morning. At current exchange rates, this equates to an 84 Australian cents per share fully franked dividend, which represents an attractive 3.5% dividend yield based on yesterday's close price.

Eligible Woodside shareholders can look forward to being paid this dividend early next month on 2 April.

What's next?

According to a recent note out of Morgans, its analysts expect Woodside to pay dividends of approximately $1.33 per share in FY 2025 and then $1.45 per share in FY 2026.

This will mean dividend yields in the region of 5.8% and 6.3%, respectively.

Morgans also sees plenty of upside for investors over the next 12 months. It recently put an add rating and $30.25 price target on Woodside's shares. This implies potential upside of 32% from current levels.

Combined with dividends, this would mean a total potential return in the region of 38% if Morgans is on the money with its recommendation and estimates.