Woodside Profit Surges Fivefold On Gas Prices, BHP Merger

woodside-profit-surges-fivefold-on-gas-prices,-bhp-merger

© BloombergWoodside office tower.

Woodside office tower.

Woodside Energy Group, Australia’s biggest oil and gas producer, said first-half profit soared more than fivefold on the back of higher prices and the takeover of BHP Group’s energy assets.

Net income for the six months through June 30 rose 417% to $1.64 billion as the average realised price more than doubled from a year earlier to $96.40 a barrel of oil equivalent, the Perth-based company said Tuesday. The completion of the integration of BHP’s petroleum business in June also helped lift production by 19% to 55 million boe.

Woodside has faced investor and activist scrutiny over its increased contribution to climate change following the all-share takeover of BHP’s petroleum assets, which made it Australia’s largest energy company and one of the world’s biggest liquefied natural gas (LNG) suppliers. The company has used the global energy crunch to defend its decision to continue to invest in production such as the Scarborough project, which is set to supply its first LNG cargo in 2026.

“The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on the importance of gas in the world energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70% of Woodside’s portfolio,” Chief Executive Officer Meg O’Neill said in a statement.

The result was “in-line to marginally better than expectations,” Citigroup Inc. analysts Paul McTaggart and Tom Wallington said in a note. Price volatility and geopolitical tension are among key risks for the company, along with potential cost blowouts in new oil and gas projects, they said.

Woodside said it would pay a half-year dividend of $1.09 a share, more than three times last year’s level. The company’s shares gained as much as 3.8% in Sydney on Tuesday to their highest level since July 2019.

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