Woodside Petroleum Ltd has posted a sharp rise in annual net profit on stronger production and commodity prices, and says it will lift output further in 2009.
Australia's second largest oil and gas producer also said it would raise more debt and consider selling non-core assets to help fund its $12 billion Pluto liquefied natural gas (LNG) project in Western Australia.
Woodside posted a 73.4 per cent jump in calendar year net profit to a record $1.786 billion, and a 56 per cent leap in revenues to $5.99 billion.
The result was boosted by higher commodity prices for most of the year and increased output, which was partially offset by increased production costs.
Earnings were hampered in the December quarter by weaker commodity prices and foreign exchange rate losses totalling $235 million.
The average realised oil price fell from $A135.37 per barrel in the third quarter to $A72.59 per barrel in the fourth quarter.
Also, chief financial officer Mark Chatterji told a teleconference the federal government's condensate tax had cost the company more than $100 million in 2008.
Mr Chatterji said the company had decided to tighten its belt in light of lower oil prices.
"Management has implemented a series of reductions in budgeted spending across all parts of the company that total about $500 million," he said.
"This is a combination of eliminating some activity, deferring some activity into 2010, working more efficiently, and realising benefits from the commodity cost environment."
Chief executive Don Voelte said Woodside would only consider divesting non-core assets, which excluded its LNG projects in Australia and the Timor Sea.
It also excluded tie-in wells for oil facilities in Australia and at the Neptune project in the US.
"We are looking at activities that are outside of those, and deferring and cutting activities," Mr Voelte said.
"We have some non-core assets that we're taking a hard look at."
The company intends to raise between $US1 billion ($A1.56 billion) and $US1.7 billion ($A2.65 billion) in debt during 2009, adding to $US1.85 billion ($A2.89 billion) in existing debt facilities.
"If the debt on offer is attractive, we may raise more than $US1 billion to $US1.7 billion and use the excess to repay both bilateral and other short-term facilities, so that capacity can be used again in 2010," Mr Chatterji said.
Woodside achieved annual production of 81.3 million barrels of oil equivalent (mmboe) in 2008, up 15 per cent on 70.6 mmboe in 2007, and also reaffirmed its 2009 production target of 81-86 mmboe.
It said its 2008 profit was helped by a full year of production at the Otway gas project offshore Victoria and the Stybarrow oil field, offshore WA.
It was also boosted by the start-up of the Power Play and Neptune projects in the US, the Angel gas field and Vincent oil field off WA, a fifth LNG processing "train" at the North West Shelf (NWS) facilities near Karratha in WA, plus increased equity in the NWS oil assets.
Woodside declared a fully franked final dividend of 55 cents per share, resulting in a full-year dividend of $1.35 per share, up 30 per cent on 2007.
Mr Chatterji said a dividend reinvestment plan would remain in place during construction of the Pluto project, which is almost half complete and is slated for commissioning in 2010.
Woodside's shares rose $1.10, or 3.4 per cent, to $33.50.
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