Shareholders in Australia's largest oil and gas producer Woodside Petroleum are set to pocket smaller dividends this year if oil prices remain weak.
JP Morgan researchers estimate Woodside's 2015 dividends could fall to 64 US cents per share if oil prices stay around $US50 a barrel, from an expected $US2.58 in 2014.
Earnings per share are also expected to take a substantial hit, as oil prices fell five per cent overnight to new five-and-a-half-year lows.
JP Morgan has maintained its current oil price forecast of $US82 a barrel for 2015/16, but admits it looks optimistic after recent falls.
"Given Woodside's leverage to oil prices we feel the magnitude of its outperformance relative to peers squarely reflects its strong balance sheet and ability to weather the current storm," JP Morgan analyst Benjamin Wilson said in a research note.
"We caution however that the magnitude of earnings and dividend reductions should the current oil price environment persist may surprise some in the market."
In August, Woodside increased its interim dividend by 34 per cent to a record high $US1.11 a share.
Woodside will confirm its final dividend for 2014 in February, and deliver a quarterly production and revenue report on January 15.
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