Woodside Petroleum is promising to deliver strong dividends to shareholders but has no plans for a one-off major capital return after exiting its Leviathan project.
Woodside says it will maintain its current dividend payout ratio as it generates significant free cash over the next three years.
A day after pulling out of the $US2.5 billion Leviathan gas project, Woodside chief financial officer Lawrie Tremaine told an investor briefing that free cash flow levels would increase well above the 2014 dividend level forecast by analysts.
“We expect we will be able to maintain our current level of dividends for the foreseeable future,” Mr Tremaine said.
Return of surplus cash was identified as a priority after debt servicing, dividend payment and growth capital.
Woodside’s dividend ratio is currently 80 per cent of underlying net profit after tax.
The exit from the Israel-based Leviathan project sparked calls for a capital return to investors.
Woodside says it will focus on new projects in the $1 billion-to-$5 billion range and maintain a disciplined investment stance, with the Browse gas project in Western Australia to be the “foundation” of its next phase of growth.