Australia’s second largest oil and gas producer posted a 67 per cent lift in net first half profit to $1.016 billion, driven by high oil prices and greater production volumes.
Woodside said the net result included significant items relating to the realised gain of $19 million from the sale of equity interests in the $12 billion Pluto liquefied natural gas (LNG) project near Karratha in Western Australia. It also included a loss of $12 million from the sale of producing assets in the United States.
Underlying net profit for the half was $1.009 billion, up 86 per cent from $545 million in the same period last year.
The company reported record revenues of $2.6 billion, up 45 per cent from $1.8 billion previously.
Production totalled 36.5 million barrels of oil equivalent (Mmboe), up four per cent from 35 Mmboe in the previous corresponding period.
The company said it was on track to achieve a full year production target between 80 Mmboe and 86 Mmboe and continued to focus on improving the business and delivering long-term growth through LNG.
Woodside said the increase in first half profit was driven by stronger production volumes and higher commodity prices, which outweighed the negative effect of increased production costs and strong Australian dollar on overseas earnings.
The lift in production costs was due primarily to the start up of Australia’s deepest oil field development, Woodside’s Stybarrow equal joint venture with BHP Billiton, offshore from Exmouth in Western Australia.
Intervention work on the nearby Enfield oil project also added to production costs.
Woodside said it expected stronger production in the second half, with contributions from re-drills of Enfield, and additional oil equity in its flagship North West Shelf Venture (NWSV) near Karratha following the purchase of Shell’s 16.7 per cent interest in the Cossack Wanaea Lambert Hermes and Egret oil fields.
The NWSV produces LNG, pipeline gas, oil, liquefied petroleum gas and condensate, which is a light crude oil extracted from natural gas.
The recently commissioned fifth production `train’ at the NWSV, the Vincent oil project and Angel gas project in WA, and Neptune and Power Play oil and gas projects in the Gulf of Mexico will all contribute to a lift in production this half.
Woodside continues to construct the Pluto LNG project near the NWSV while development concepts for Pluto Train 2 are progressing.
Also progressing are development plans for the Sunrise natural gas project, which straddles a boundary between Australian waters and a region jointly administered by East Timor and Australia, and Woodside’s remote Browse Basin LNG project north-west of Broome.
The company said it continued to consider a range of options in relation to its remaining African assets after divesting its underperforming Mauritanian operations last year.
During the first half, Woodside exited Kenya, reduced its interest in licences in Sierra Leone and Liberia, and took up a 20 per cent interest in a block onshore Peru.
Woodside said it was examining options for raising between $1 billion and $2 billion in debt financing during the second half.
The company reported a hedging loss of $71 million for the six months to June 30 and said no new hedges were put in place during the period.
It declared an interim dividend of 80 cents per share, fully franked, up 63 per cent compared with the interim dividend of 49 cents per share for the first half of 2007.
Shares in Woodside were up $1.55, or 2.74 per cent, to $58.05 at 1.37pm (AEST).
