Australia's Woodside Energy on Thursday unveiled a new payout policy for investors and flagged it would axe around 10 per cent of its workforce globally, as it set out higher targets for cost cutting and return on capital.
Favoured by investors for paying out up to 80 per cent of its underlying net profit in dividends since 2013, Woodside scrapped that policy and said it would now pay 20 per cent to 40 per cent of adjusted operating cash flow, with 20 per cent as the base and another 20 per cent for additional dividends or buybacks.
CEO Liz Westcott said Woodside now expects to slash costs by $400 million, up from $350 million announced in August, and the company aims to achieve a 12 per cent to 15 per cent return on investment for all projects by the middle of the next decade.
"Our priority now is to extract more value from our portfolio," Westcott said in a statement ahead of the company's annual Capital Markets Day.
Australia's biggest independent oil and gas company previously had a return target of more than 15 per cent for offshore oil projects, more than 12 per cent for gas projects and more than 10 per cent for new energy projects.
Jamie Hannah, deputy head of investments and capital markets at fund manager Van Eck, said tying dividends to cash flows rather than profit was "probably economically better" as profit figures can be affected by non-cash items. However a lower headline payout ratio could leave income-oriented investors worse off.
"Hopefully, it won't have a material impact over the long term on the actual yield that investors are getting," he said.
Woodside's shares fell six per cent on Thursday, roughly in line with rival Santos, following a slide in oil prices to their lowest since August 31.
Woodside said it would axe at least 500 jobs as part of its cost-cutting effort. As of December 2025, it had 4,693 employees, mostly in Australia and the Americas, according to its annual report.
It expects to increase production by 32 per cent to 280 million barrels of oil equivalent by 2032. That includes output from its five-million-tonne-a-year Scarborough liquefied natural gas project, set to produce its first cargo by the end of the year, the Trion oil project in the Gulf of Mexico, and the 16.5-million-tonne Louisiana LNG facility coming online by 2029.
Last week the company signed a 20-year deal to supply QatarEnergy with up to three million tonnes a year of LNG from the Louisiana plant starting in 2030, and is working on further deals.
"Customers are looking to get a range of supply contracts," Westcott said, adding that some were seeking flexible deals, while others were discussing 20-year or seven-year contracts.
Woodside still wants to sell down its stake in Louisiana LNG, where the second phase is set to involve an expansion to 27.5 million tonnes a year, but Westcott said she, "remained patient".
"We're looking for a partner who will be with us for decades," she said.
Under Westcott, who was appointed CEO in April after Meg O'Neill left to lead BP, Woodside has divested several assets including its Trinidad and Tobago gas fields and its stake in the Greater Sunrise project, and is looking to sell a clean ammonia project.
The company also dropped its "Scope 3" emissions target, which relate to local emissions from the use of its products, and on Thursday unveiled a new climate plan that aims to reduce its direct and indirect "emissions intensity" by 30 per cent by 2035 from 2025 levels.
(Reporting by Helen Clark in Perth and Sherin Sunny in Bengaluru; Editing by Shailesh Kuber and Sonali Paul)