WOODSIDE ENERGY GROUP LTD By David Winning
SYDNEY--Woodside Energy Group Ltd. sharply raised its interim dividend, offering shareholders an early benefit from its recent acquisition of BHP Group Ltd.'s petroleum business.
Perth-based Woodside said its net profit totaled US$1.64 billion for the six months through June, well above the US$317 million reported at the corresponding stage of 2021. On an underlying basis, the company said its profit totaled US$1.82 billion.
Directors of the company declared an interim dividend of US$1.09 per share, up from US$0.30 a year ago.
"The dividend payout is based on 80% of underlying net profit plus 80% of the merger completion payment adjusted for working capital, equivalent to returning approximately 81% of free cash flow," said Chief Executive Meg O'Neill.
Last month, Ms. O'Neill told The Wall Street Journal that confidence in the company's financial position had been a factor in the decision to terminate discussions over the sale of equity in the Sangomar oil field development in Senegal.
The BHP transaction has transformed Woodside into one of the world's ten-largest producers of liquefied natural gas and management is targeting more than US$400 million in annual savings from integrating assets, with the full benefit set to be captured in 2024.
The deal's completion coincided with a period of elevated oil and gas prices as Russia's invasion of Ukraine has fueled concerns around the security of energy supply. While prospects of a global economic downturn as central banks tackle inflation have recently begun to weigh on sentiment, the price of Brent crude--the global benchmark--remains up 35% on a year earlier.
The benefit of higher prices was evident in Woodside's recent quarterly activities report. Woodside said its crude oil fetched an average price of US$110 a barrel in its fiscal second quarter, while the average realized price for its liquefied natural gas output was US$13.8/mmBtu. Combined with a 60% increase in production, the higher prices helped to drive Woodside's second-quarter sales revenue to US$3.44 billion, up 44% on the prior three months.
Woodside produced 54.9 million barrels of oil equivalent in its fiscal first half and it is targeting output of between 145 million and 153 million barrels of oil equivalent across the year as a whole.
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
08-29-22 1912ET
