Woodside Petroleum has boosted its shareholder payout after stronger oil and gas prices and a steady reduction in costs contributed to a sharp lift in its half year profit.
The energy giant's net profit in the six months to June 30 was up 49 per cent from a year earlier to $US507 million ($A648 million), even as revenue declined four per cent to $US1.87 billion ($A2.39 billion) due to lower sales volumes.
Chief executive Peter Coleman said Woodside is delivering on its long-term plan and is in a strong position heading into the second half of 2017.
"Our existing business is performing well and we are pursuing cost effective developments that will be ready in time to meet growing global demand," he said.
Woodside has increased its fully franked interim dividend by 44 per cent to 49 US cents per share.
The company's shares rose by more than five per cent in early trade, and closed at $29.90, up 76 cents, or 2.6 per cent.
Australia's largest oil and gas producer said it realised an average price of $US43 per barrel of oil equivalent (boe) during the first six months of 2017, a 10 per cent increase from the same period of 2016.
Unit production costs dropped six per cent from 2016 to $US4.90 per boe.
That helped to nearly treble free cash flow to $US445 million ($A568 million) and lower its breakeven oil price for the period to $US34 a barrel.
"There are plenty of signs that the oil markets are continuing their slow and steady rebalancing," Mr Coleman said.
The first shipments from the Chevron-operated Wheatstone LNG project in Western Australia are expected to start in September, which will give a boost to Woodside's overall output.
The company is also progressing with exploration plans in Myanmar and Senegal.
Woodside in May outlined plans to boost cash flow over the next few years through expansion of its existing projects, including the Wheatstone and Pluto LNG operations, and ruled out investment in any major new projects in the near term.
"We are living within our means, and we are moving on our growth projects nicely," Mr Coleman said.
RBC Capital Markets analyst Ben Wilson said the results were broadly in line with expectations, although operating cashflows were stronger than anticipated.
HIGHER PRICES, LOWER COSTS DELIVER FOR WOODSIDE:
* Half year net profit up 49pct to $US507m
* Revenue down 3.6pct to $US1.87b
* Interim dividend up 15 US cents to 49 US cents, fully franked
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