Woodside Energy Profit Up As Control Speculation Grows

LNG being offloaded in China. (Photo by VCG/VCG via Getty Images)

VCG via Getty Images

Woodside Energy, Australia’s biggest oil and gas company lifted its underlying net profit by a modest 7% in the June half-year adding to speculation of a possible takeover bid.

The profit increase from $1.24 billion to $1.33 billion was against a background of high prices for oil and gas caused by the Iran war.

Despite the slightly better profit the company has lifted its interim dividend from 53 cents to 57c.

Woodside chief executive Liz Westcott said the company had delivered strong production, cash flow and shareholder returns, while continuing to execute the next phase of growth.

Total operating revenue in the latest half year was up 13% at $7.5 billion from the production of 86.5 million barrels of oil equivalent (oil and gas).

The profit result barely moved the Woodside share price which rose by 2.5% in early trading on the Australian stock market.

Greater investor interest is expected when the company’s flagship expansion project, the Scarbough gas development, starts shipping liquified natural gas (LNG) later this year.

Close attention is also likely to be paid to hints of a merger proposal from global oil major Exxon Mobil amid signs of boardroom instability as long serving chairman Richard Goyder steps down without a clear indication yet of his successor.

A contender for Woodside chairman is a seasoned mining industry executive Mark Cutifani, a former chief executive of London-based Anglo American, who has a seat on the Woodside board.

But questions have been asked in the Australian news media about Cutifani’s connections to Elliott Management an aggressive U.S. hedge fund.

Elliott is a major investor in the Australian gold mining company Northern Star which has been undergoing a difficult management overhaul.

Cutifani was a nominee from Eliott for a Northern Star board seat.

There was also a story in Australia’s daily business newspaper The Australian Financial Review alleging that not all Woodside directors were aware of Cutifani’s role in Elliott’s move on Northern Star.

International interest in Woodside has been growing since reports first surfaced earlier this year about Exxon Mobil looking to broaden its exposure to LNG in the Asia Pacific region.

Woodside, which does not have a dominant shareholder since another oil major, Shell, sold down its interest about 10 years ago.

As well as a wide-open share register Woodside is a major producer of LNG with interests in Australia and through the development of a U.S. project in Louisiana.