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Woodside’s Annual Profit Almost Doubles on Pluto LNG Project

Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, said full-year profit almost doubled, driven by the A$15 billion ($15.5 billion) Pluto liquefied natural gas project.

Net income rose to a record $2.98 billion in the 12 months ended Dec. 31 from $1.51 billion a year earlier as the company also gained from the sale of a stake in the proposed Browse LNG venture in Australia, Woodside said today in a statement. That exceeded the $2.90 billion median estimate of seven analysts surveyed by Bloomberg. Excluding one-time items, profit increased 25 percent to $2.06 billion.

The Pluto development in Western Australia has boosted Perth-based Woodside’s sales and output since beginning in April, generating cash to expand in countries from Israel to Myanmar as the Australian LNG industry copes with rising costs. Woodside’s sales climbed 30 percent to $6.22 billion, with Pluto operating at 89 percent capacity, compared with its forecast of 65 percent, according to the statement.

“The fact that Pluto is producing strongly above the internal plan is terrific,” Andrew Williams, a Melbourne-based analyst at RBC Capital Markets, said today by phone. “It doesn’t matter what it cost to get it there, we’re now in the cash-flow phase. It has not quite been transformational, but it certainly has taken the company to another level.”

Woodside, led by Chief Executive Officer Peter Coleman, plans to develop the Browse LNG project in Western Australia, estimated by Deutsche Bank AG to cost A$44 billion, and the Sunrise floating LNG venture in the Timor Sea. Woodside last year put a proposed Pluto expansion on hold after saying in August that its drilling campaign failed to find enough gas.

Woodside’s shares rose 3.1 percent to A$39.07 in Sydney trading, the most in seven months, compared with a 0.3 percent gain for Australia’s benchmark S&P/ASX 200 Index.

Israel, Myanmar

Woodside and its partners in the proposed Browse venture, including Royal Dutch Shell Plc, expect to decide by mid-2013 whether to go ahead with a new development in the Kimberley wilderness region in Australia’s northwest.

The Browse partners probably will determine the proposal for a new processing hub on the coast isn’t viable and opt instead to process the gas on a floating LNG vessel offshore, according to a Feb. 4 report from Goldman Sachs Australia Pty Ltd. That change in plans may lead to delays, Goldman Sydney- based analysts Mark Wiseman and Anthony Ta wrote.

Woodside reached a deal last year to sell a 14.7 percent stake in Browse to Mitsubishi Corp. and Mitsui & Co. for $2 billion. BHP Billiton Ltd., Australia’s largest oil and gas producer, agreed in December to sell its stake in Browse to PetroChina Co. for $1.63 billion.

Woodside, which has studied expansion options in the Eastern Mediterranean, Southeast Asia and the Americas, agreed in December to pay as much as $2.3 billion for a stake in Israel’s largest natural gas field, Leviathan. The company also reached two exploration agreements last year off Myanmar.

“Woodside is not all about two or three major Australian LNG projects that consume our time and resources,” Coleman said today on a call with analysts. “We have a good spread of options to generate value. Having said that, we know that we have to continue to grow our portfolio.”

Woodside plans to invest $2.6 billion in 2013, more than previously forecast because of additional spending on Leviathan and Myanmar, the company said.

Woodside had $2.4 billion in cash and $1.7 billion in undrawn debt at the end of last year, the company said today. The oil and gas producer in 2012 recorded an expense of $17 million for the cost of emissions following the start of Australia’s carbon price, according to the statement.

The company’s final dividend rose 18 percent to 65 cents, Woodside said. The board decided to suspend the dividend reinvestment plan for the 2012 final dividend, it said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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