Pluto sends Woodside earnings into orbit

A STRONG initial contribution from its Pluto development and the sell-down of equity in Browse Basin helped Woodside Petroleum double profits for last year. But a decision on the controversial Browse Basin development is not due until the June quarter.

A STRONG initial contribution from its Pluto development and the sell-down of equity in Browse Basin helped Woodside Petroleum double profits for last year. But a decision on the controversial Browse Basin development is not due until the June quarter.

Last year, Woodside's net profit rose 98 per cent to $2.98 billion as revenue rose 29.6 per cent to $US6.2 billion ($6 billion).

Delays finalising the $US14.9 billion Pluto project weighed on the performance but its completion will underpin a further lift in production volumes this year.

Earnings per share rose to $US3.66 from $US1.90, with the final dividend raised by US10¢ to a fully franked US65¢, giving an annual payout of $US1.30, up from $US1.10.

Earnings were flattered by the $US974 million gain on the partial sale of equity in Browse Basin for a gross amount of $US2 billion, which helped reduce debt.

It comes as the group is faced with a rise in spending this year, on development projects and exploration.

Capital spending for this year is budgeted at $US2.58 billion, up from $US1.8 billion last year, boosted by spending on the Leviathan development and on a project in Burma. This excludes any outlays on Browse, with an update due by midyear, Woodside said.

Exploration spending this year is to rise to $US478 million, well up on the $US260 million spent last year, with eight offshore wells planned in Australia alone.

Last year, the average realised liquefied natural gas price for exports from the North West Shelf project was $US77.85 per barrel of oil equivalent, up by more than $US10.

Woodside said long-term prices continue to be indexed to 85 per cent to 90 per cent of oil price movements, despite pressure to break the link between the oil price and export liquified gas prices.

By the end of next year, about 85 per cent of Woodside's long-term contracted LNG portfolio will have been subject to price reviews in the preceding three years, it said.

The gas market remained tight, with the prospect of delays in completing some of the planned projects to buoy prices and, with uncommitted gas available from next year, Woodside was well-positioned to benefit.

Woodside said that the US was likely to account for about 10 per cent of global trade, compared with 25 per cent by Australia and 20 per cent by Qatar.

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