Cashed up Woodside Petroleum is looking at buying assets in North America following its failed buyback of Shell shares.
Analysts say Woodside has the capacity to snap up a significant LNG project in Canada as some of the world's largest oil and gas companies look to offload assets and concentrate on onshore shale in the US.
The US shale boom has displaced demand for Canadian gas and presented potential growth opportunities for companies such as Woodside.
Chief executive Peter Coleman says there are now more merger and acquisition opportunities than a few years ago.
"We're going to look long and hard at those opportunities," Mr Coleman said on Wednesday.
"They are better priced than what they were two years ago."
Mr Coleman says merger and acquisition activity will pick up over the next two to three years as investors focus more on profitability.
"A number of our peer group are refocusing their activities towards North America and those companies that are North America-focused with international assets are looking at those assets."
However, he said while Woodside aimed to have $5 billion available for growth projects, it would be cautious about examining assets which had been on that market for some time.
Woodside has a land access agreement to conduct feasibility studies to build a LNG export facility at Grassy Point on the northwest coast of Canada.
Australia's largest oil and gas producer increased half-year net profit by 27 per cent to $US1.1 billion ($A1.19 billion).
The profit result was driven by higher prices, sales volumes and lower exploration and evaluation expenses and underpinned by record production of 46.5 million barrels of oil equivalent (mmboe).
Positive free cash flow of $US1.825 billion, was up 158 per cent on 2013.
The Perth-based company has only one major growth project, the Browse joint venture LNG development in Western Australia.
Woodside indicated that the Browse joint venture's engineering and design schedule could be pushed out by several months but said this would not have any impact on a final investment decision which is due in the second half of 2015.
It comes after shareholders this month scuttled a $US2.7 billion ($A2.92 billion) plan to remove Royal Dutch Shell from the company's share register.
Woodside is also pushing ahead with its international exploration program.
Mr Coleman added that following its recent experience with the Leviathan project in Israel, Woodside did not want to be locked into a particular strategy.
The company reaffirmed full year production guidance of 89 to 94 mmboe and increased its interim dividend by 34 per cent to a record high $US1.11 a share.
An analyst, who did not wish to be named, said the company would most likely try again to remove Shell from the company's share register as it reviews capital management options.
Woodside shares rose 33 cents, or 0.8 per cent, to $43.38 on Wednesday.
STRONG PRODUCTION DRIVES WOODSIDE'S RECORD PROFIT
* Net profit of $1.1b, up 27pct from $US873m in 2012/13
* Revenue of $3.551b, up 24pct from $US2.86b
* Fully-franked final dividend of $US1.11 per share, up 34 per cent from US83 cents
Share
