Woodside pays highest dividend since 2014 as profits jump four fold

Woodside (ASX: WDS) underlying profits jumped four-fold to US$1.82bn in the first-half as average realised oil prices more than doubled year-on-year to US$96.4 a barrel.

The underlying profit beat Morgans expectations of US$1.77bn.

"Production for the half-year was 19% higher at 54.9 million barrels of oil equivalent, benefiting from the contribution in the month of June of the former BHP assets and improved reliability at our LNG facilities," said CEO Meg O'Neill.

Woodside declared an interim dividend of 109 US cents per share, the company's largest interim dividend since 2014. The stock will go ex-dividend on Thursday, 8 September.

Earnings at a glance:

Source: Woodside | Table: Market Index

Higher production, even higher prices

Higher realised energy prices and increased volume primarily due to the inclusion of BHP Petroleum assets contributed US$2.48bn and US$820m to Group revenue.

The average realised price for Woodside's energy products including LNG, gas and oil rose 116% from US$44.6 to US$96.4. Strong market conditions were partially offset by factors including higher production and logistics costs, losses associated with hedging and general administrative costs.

Looking ahead, Woodside noted that "LNG markets are incentivising new global LNG projects as Europe replaces."

Adding that "gaseous fuels remain critical to the energy transition with low-risk and reliable sources advantaged ... Asian LNG demand [is] not expected to peak before mid-2040s."

Ongoing developments

Pluto LNG in WA: Production was increased and commenced gas flows through the Interconnector pipeline to the Karratha Gas Plant. Project generated US$419m revenue in the first-half.

North West Shelf Project: One of Australia's largest resources projects. Woodside's 33.33% interest produced 13.1MMboe or 23.9% of overall first-half production. This was down -1% compared to a year ago due to natural field decline and planned maintenance.

Scarborough and Pluto Train 2: All major equipment items procured. Pluto Train 2 construction works have commenced. Woodside is targeting first LNG cargo for Scarborough in 2026.

Sangomar Field Development Phase 1: Senegal's first offshore oil projects is 63% complete as at 30 June 2022. Woodside has an 82% participating interest in the project and targeting first oil in the second half of 2023.

2022 Full-year guidance

Woodside reaffirmed its 2022 production guidance of 145 to 153MMboe.

Capital expenditure for the year is expected to be within the range of US$4.3bn to US$4.8bn, with Sangomar and Scarborough/Pluto Train accounting for a respective 25% and 45% of capex spend.

Morgans forecasts Woodside to post US$14.55bn revenue and US$4.45bn net profit for the full year, up 105% and 174% compared to a year ago.

Woodside share price chart