Woodside cracked the billion dollar profit mark for the first time in the June 30 half as it rode oil and gas price higher and higher.
The company will get several weeks of high prices in the current half and even the current lowered price of around $US112- $US117 a barrel, these prices are still higher than they were in the second half of last year.
World prices edged higher yesterday and overnight on fears about a new storm in the US and the latest figures on US oil and gas stocks.
The company’s share price reflected the rise in world prices and the solid interim result, rising $1.92 to $58.42.
It will also get a boost from higher production, especially from its fields offshore the WA coast.
Shareholders will be rewarded with a sharply higher interim dividend of 80 cents a share (fully franked), compared to the 49 cents a share paid for the first half of 2007.
Higher production helped as well and the company’s net profit of $1.016 million represented a return on sales of $2.6 billion, up 45%) of around 42%.
The interim profit compares very favourably with the $610.1 million reported in the first half of 2007.
The result includes significant items relating to a gain on the sale of Pluto equity interests of $19 million and a loss of $12 million from the sale of producing assets in the US.
Underlying net profit for the six months to June 30 was $1.009 billion compared with $545 million in the same period last year.
Production rose to 36.5 million barrels of oil equivalent (Mmboe) in the six months, from the 35 Mmboe in the previous corresponding period.
Woodside expects higher output from re-drills of its Enfield oil and gas project near Exmouth in Western Australia, and additional oil equity in the North West Shelf Venture near Karratha following the purchase of Shell’s 16.7% interest in the Cossack Wanaea Lambert Hermes operations.
It also said new production from Vincent, Angel, North West Shelf Train 5, Neptune and Power Play projects would contribute to a lift in production in the second half.
"Consequently Woodside is on track to achieve its 2008 production target of 80 to 86 MMboe," the company told the ASX.
The company is starting work on the nearby Pluto LNG project while development concepts for Pluto Train 2 are progressing.
And it’s also pushing ahead with 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 its remote Browse Basin LNG project north-west of Broome.
Woodside said its increased profit was driven by stronger production and higher commodity prices, which outweighed the negative impact of the strong Australian dollar and increased production costs.
The lift in production costs was primarily due to the start up the Stybarrow oilfield in the Exmouth Sub-Basin and intervention work on the nearby Enfield project.
Woodside said it continues 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, the company exited Kenya and took up a 20% interest in a block onshore Peru.
