Australia's Woodside Petroleum sees big profit jump

Aug. 16 (UPI) -- Australian energy company Woodside Petroleum said its 49 percent jump in first-half profits came in part through a reduction in production costs.

Woodside reported a net profit of $507 million for the first half of the year, a 49 percent increase from the same period in 2016. Production costs of $4.90 per barrel of oil equivalent was 6 percent lower than the first half of 2016 and 2 percent lower than last year's average.

"Our free cash flow is up 170 percent from the first half of last year to $445 million and our break-even oil price for the half was $34 per barrel," CEO Peter Coleman said in a statement.

Oil and gas companies are learning to do more with less in an era when crude oil prices are about 50 percent lower than they were just three years ago. The price for Brent crude oil, the global benchmark, was around $51 per barrel early Wednesday.

Woodside has boasted of a steady string of successes with its global exploration and production efforts, notably in the natural gas sector. Last week, the company declared its third natural gas discovery since early 2016 at the Southern Rakine basin off the coast of Myanmar. Dubbed Pyi Thit-1, the company said it's another success story for an underdeveloped part of the world.

For liquefied natural gas, the company said it was gaining good traction, particularly at its Wheatstone project in Australia. Drawing on a global portfolio, the company said it executed sales and purchase agreements for more than a dozen cargoes of LNG for delivery between 2017 and 2019.

"We look forward to Wheatstone production commencing and remain focused on supporting the operator [Chevron] in achieving this in a safe and reliable manner," Coleman said.

Woodside reported production for the three months ending March 31 at 21.4 million barrels of oil equivalent, down about 10 percent from last year. It reported production of 42.2 million barrels of oil equivalent for the period ending June 30.

On oil market dynamics, the company said rebalancing was in progress and crude oil prices were bound in a range between $45 per barrel and $60 per barrel. The Organization of Petroleum Exporting Countries aims to balance the market by pushing the global surplus of crude oil to a five-year average through coordinated production declines.