Woodside Reports Net Profit of A$1,107.4 Million

The 2005 reported net profit after tax of A$1,107.4 million includes significant items of A$69.7 million (after tax). These items comprise the sale of Woodside's interests in Blacktip gas and associated permits (+A$17.8 million) and in Hardman Resources Ltd. (+A$51.9 million). The 2004 reported net profit after tax of A$1,146.4 million was boosted by a larger amount of significant items which totaled A$474.6 million (mainly due to the sale of 40% of Enfield oil and related permits).

Woodside's 2005 underlying net profit after tax of A$1,037.7 million was 54.5% higher than the comparable underlying profit in 2004 largely due to higher product prices and increased volumes. The underlying net profit after tax also includes the recognition of a US tax asset totalling A$95.4 million. This amount relates to past expenditures in the Gulf of Mexico where previously there was not sufficient certainty that these losses would be utilized against future taxable profits. The Neptune final investment decision in 2005 has now provided the revenue certainty required to permit recognition of this asset.

The effective tax rate (excluding significant items) of 27.1% for 2005 was lower when compared to 34.1% recorded in 2004, mainly due to the recognition of US-based tax assets.

Total production in 2005 of 59.7 MMboe was 4.0% higher than the 2004 production and exceeded the initial stated target of 56.6 MMboe and the revised stated target of at least 59.0 MMboe.

Record annual revenue from oil and gas operations of A$2,746.7 million was 29.3% higher than 2004 primarily due to stronger product prices. Woodside's average realised oil price for 2005 was A$72.88 per barrel, 34.5% higher than that of 2004 (A$54.19 per barrel).

Woodside drilled 15 exploration wells in 2005, seven of which were hydrocarbon discoveries. A further four wells were drilling at year-end. This compares to 14 exploration wells drilled in 2004.

The 2005 expensed exploration and evaluation amount of A$306.4 million was 21.0% higher than 2004. The higher expense resulted from a higher overall exploration spend of A$346.2 million in 2005 compared to A$239 million in 2004 plus a greater amount of expensed well costs. Higher drilling rig rates (exacerbated in the US by hurricane-related stock damage in the Gulf of Mexico) and increased demand for seismic vessels as a consequence of higher commodity prices, have also contributed to these cost increases.

New Reserve bookings of 35.5 MMboe (Proved plus Probable) and positive revisions of previous estimates (7.6 MMboe net) helped replace 73% of 2005 production.

As at 31 December 2005, Proved plus Probable Reserves of 1,243.8 MMboe were 50.1 MMboe lower than 2004 due largely to a net divestment of 34.5 MMboe. Proved Reserves were similarly affected by a net divestment of 29.8 MMboe, resulting in a closing balance of 899.6 MMboe (50.9 MMboe lower than 2004).

The three-year rolling average Organic Reserves Replacement Ratio is 99% (Proved plus Probable, excluding acquisitions and divestments). This reduces to 65% if acquisitions and divestments are included.

Contingent Resources increased 577 MMboe, to 3,594 MMboe (up 19%), primarily due to the addition of the Pluto, Halladale and Black Watch gas discoveries in offshore Australia. Should these fields be commercialized, Reserves would be increased by a significant volume.