Even though Woodside Petroleum, Australia’s biggest oil and gas company, disappointed some analysts with the its 2010 result yesterday shareholders won’t have much to complain about with a higher final and full year dividend.
The company revealing a 35% rise in underlying annual profit as higher oil and gas prices offset lower production, but missed broker forecasts.
The shares rose 56 cents, or 1.4%, to a high of $43.30, before settling back to close off 16c at $42.58.
Reported net profit after tax was $US1,575 million before non-controlling interests.
"This result was favourably impacted by an outstanding year of North West Shelf (NWS) operations which achieved records for production, number of cargoes, revenue and profit," Woodside directors said in the statement yesterday.
"The reported net profit after tax included significant items totalling $US157 million. The underlying net profit after tax (pre-significant items) was $US1,418 million."
That was up from $US1.052 billion in 2009, but analysts had been looking at a figure of around $US1.570 billion for underlying earnings.
"Sales revenue totalled $US4.193 billion the sale of 72.2 million barrels of oil equivalent (mmboe) (down from 2009’s 80.7 mmboe).
"Sales volumes were down from 2009 primarily due to the sale of Woodside’s interest in the Otway Gas Project and oil-field natural decline. These reductions were partially offset by record production from NWS and improved Vincent reliability.
"Revenue in 2010 increased by $US706 million primarily due to higher commodity prices along with the positive conclusion of certain LNG pricing negotiations," directors said.
The board declared a fully-franked final dividend of US55c per share (2009: US49c), resulting in a full year dividend of US$1.05 a share (2009: US95c).
Directors said that given the company’s "current growth program, the dividend reinvestment plan (DRP) remains activated for the 2010 final dividend. The DRP will be fully underwritten."
Woodside, whose top shareholder, Royal Dutch Shell, cut its stake by a third to 24% last November, said it was on course to consider a final go-ahead for its Browse liquefied natural gas project by mid-2012.
The company is on the hunt to replace American Don Voelte, who plans to leave this year with the company’s outlook in question with doubts over the supply of gas for the expansion of its Pluto liquefied natural gas project, the resolution of the dispute with East Timor over its Sunrise LNG project and disputes with its partners and environmentalists over developing its Browse LNG project in WA.
Mr Voelte yesterday confirmed that he would remain a director of West Australian Newspapers, indicating that he may be staying in Australia after he leaves Woodside.
Woodside said its reserves replacement ration "remains strong at 148%, up 1.4% (2009: 146%). Proved plus Probable reserves at the end of 2010 were 1,680.1 million barrels of oil equivalent, up 1.7% (2009: 1,651.2 mmboe). Proved plus Probable reserve to production ratio has increased to 24 years".
The company said it had $US1,725 million in undrawn debt facilities and $US963 million in cash.
And the first train of the Pluto LNG project "was more than 95% complete at year end, with start-up targeted for August 2011 and first LNG one month later".
