Woodside Petroleum has met analyst expectations with a full year net profit of $US1.507 billion ($A1.42 billion) and is assessing acquisition opportunities that may be funded with cashflow from the Pluto liquefied natural gas (LNG) project.
Shares in Australia’s largest pure-play oil and gas producer closed up 91 cents, or 2.53 per cent, at $36.86.
The company’s net profit for calendar 2011 was down 4.3 per cent on the previous year, due mainly to the cost of delays at its $15 billion Pluto project in Western Australia’s Pilbara region.
The construction of Pluto is nearing completion and LNG shipments are slated to begin in March this year, some 15 months behind the original schedule.
Stripping out the costs of non-recurring items including the Pluto delay, underlying profit was up 16.7 per cent at $US1.655 billion ($A1.56 billion).
Woodside chief executive Peter Coleman said the underlying result was due to the strong performance of flagship North West Shelf operations near Karratha in WA.
Analysts said the result was broadly in line with consensus.
Full year production of 64.6 million barrels of oil equivalent (mmboe) was down 11 per cent on 2010, but was above updated guidance provided by Woodside in the middle of last year.
This was due to lower-than-expected cyclone activity in the December quarter and better than forecast reliability of its facilities.
Chief financial officer Lawrence Tremaine said stronger oil prices had more than offset the impact of lower production volumes.
Woodside has forecast 2012 production of 73 to 81 mmboe, with 17 to 21 mmboe expected to come from Pluto.
Rob Cole, who was on Wednesday appointed to the board as executive director of commercial after almost six years as the company’s general counsel, said Pluto represented “a step change in Woodside’s production”.
He told a teleconference that discussions are continuing with other energy companies in the region about buying some of their gas to underpin an expansion of Pluto, given that Woodside has not yet made enough discoveries to justify a second stage of the project.
Mr Coleman says Woodside should know by mid-year or perhaps by the September quarter “which way we think that will go”.
In response to an analyst question, Mr Coleman also said the company is reviewing acquisition opportunities that could be funded with cashflows from Pluto or from the sell-down of Woodside’s stake in the $30 billion Browse LNG project, near Broome in WA.
These funds could also be funnelled into increased dividend payments.
“Some of the items that you mentioned in your question are certainly items that we are considering,” Mr Coleman said during the teleconference.
The company was considering acquisitions, because it had sought to broaden its portfolio, which would likely result in new partnerships, he said.
Woodside had found several assets around the globe that were complementary to its existing portfolio, Mr Coleman said.
But it remains focused on oil and LNG, he added.
“We will be disciplined, and cash won’t burn a hole in our pocket,” he said.
“We have no desire to do a deal for the sake of doing a deal.”
Mr Coleman said there had been strong interest in the Browse equity sale, but did not name the parties.
Media reports citing unnamed sources suggest that China National Petroleum Corp has offered to buy part of Woodside’s interest in the project.
Woodside declared a final dividend of 55 US cents, the same as for the previous corresponding period.
