PERTH (miningweekly.com) – Oil and gas major Woodside has reported a 149% increase in net profits after tax for the full year ended December, which reached $1.9-billion, following a recovery in oil and gas prices.

Underlying net profits after tax for the full year were up 262% on the previous financial year, from $447-million to $1.6-billion, while operating revenues were up 93% from $3.6-billion to $6.9-billion, and operating cash flows were up by 105%, from $1.8-billion to $3.7-billion.

Woodside on Thursday reported that production for the full year reached 91.1-million barrels of oil equivalent, down from the 100.3-million barrels of oil equivalent (boe) produced in 2020, while sales volumes reached 111.6-million boe, at a realised price of $60.3/boe.

Unit production costs were reported at $5.30/boe.

Woodside CEO Meg O’Neill said the year was a transformative year in which the foundations were laid for the company’s future.

“Woodside ended 2021 in a strong financial position. Our higher underlying full-year profit of $1.6-billion and free cash flow of $851-million reflected our consistent operational performance, the improved price environment for our products and the proactive decisions made to manage our sales portfolio.

“The value-creating decisions taken in 2021 are expected to transform Woodside, consolidate our financial strength, diversify our portfolio and enable us to thrive through the energy transition.

“November 2021 could be recorded as the most remarkable month in Woodside’s 67-year history, with the agreement to merge with BHP’s petroleum business and the final investment decisions on the Scarborough and Pluto Train 2 projects.

“Our agreement to merge with BHP‘s petroleum business is expected to create a global energy company, which would have the cash generation and balance sheet strength to deliver shareholder returns through economic cycles, opportunities to realise ongoing synergies and greater capacity to participate in the energy transition,” O’Neill said.

Completion of the merger is targeted for early June, subject to a shareholder vote on the transaction targeted for May 19, and Woodside will be pursuing secondary listings on the New York and London stock exchanges, O’Neill said in a conference call.

Meanwhile, she noted that the significant cash flow generated by the Scarborough and Pluto Train 2 projects is expected to provide returns to shareholders and help fund Woodside’s future developments and new energy investments.

“An important consequence of November’s final investment decisions is an increase of over 1.4-billion boe in Woodside’s proved plus probable (2P) total reserves.”

Woodside in January completed the sale of a 49% non-operating interest in Pluto Train 2, welcoming Global Infrastructure Partners (GIP) into the project. In addition to its 49% share of capital expenditure, the joint venture arrangements require GIP to fund $835-million in additional construction expenditure, with Woodside’s share of capital spend to reduce accordingly.

“Scarborough gas developed through Pluto Train 2 will be among the lowest carbon intensity sources of liquefied natural gas delivered to north Asia, where customers are demanding lower-carbon energy to support their own emissions reduction targets. The first cargo is targeted for 2026,” said O’Neill.

Meanwhile, O’Neill noted that the execution of the Sangomar field development in Senegal is proceeding to schedule with the first well drilled and floating production, storage and offloading conversion activities ongoing. The subsea installation campaign is expected to commence in early 2022 and the project is on track for first oil in 2023.

“Our Australian project teams achieved startup of Julimar-Brunello Phase 2 and the first phase of the Pyxis Hub ahead of schedule and under budget. Construction of the Pluto-KGP Interconnector was completed, with startup planned for the first quarter of 2022.

“We had a reserves downgrade on Julimar-Brunello and a reserves revision on the Greater Pluto region following the completion of integrated subsurface studies incorporating 4D seismic and well performance data.”

O’Neill said that Woodside in 2021 strengthened its commitment to play a part in the world’s decarbonisation journey, both by reducing its net equity Scope 1 and 2 greenhouse gas emissions and advancing its plans to invest in the lower-carbon sources of energy its customers are seeking, such as hydrogen and ammonia.

“Through the year we made progress with our proposed hydrogen projects H2Perth, H2TAS and H2OK, and launched studies of large-scale solar energy and carbon capture and storage in Western Australia. “These proposals are initial steps in our strategy to position Woodside as an early mover in the sector through our targeted $5-billion investment in new energy products and lower-carbon services by 2030,” she said.