Direct line: 1300 987 995
* Underlying profit $1.70 bln v $1.85 bln market forecast
* Reaffirms sees 2014 output steady to 7 pct higher
* Expects higher prices from repriced LNG contracts, more oil
* Shares slip 0.4 pct
(Adds CEO comments)
MELBOURNE, Feb 19 (Reuters) - Woodside Petroleum
Australia's top oil and gas producer, working on the early stages of new projects off Western Australia, Israel and Myanmar to drive long-term growth, said it had succeeded in securing higher prices for renewed liquefied natural gas (LNG) contracts.
That and the resumption of production from its Vincent oil field would boost profits in the year ahead, said Chief Executive Peter Coleman.
"We're also growing our margins. Our anticipated average realised prices across all our products in 2014 are set to increase," Coleman told reporters.
The new LNG prices were "on trend with current regional pricing and traditional regional indexation," Woodside said, indicating LNG prices remained tied to oil prices, rather than being linked to cheap U.S. natural gas prices, even with North American competitors set to enter the Asian market.
Coleman also flagged the company plans to embark on a major cost-cutting effort, much like mega miners such as BHP Billiton
Woodside's growth prospects are now pinned to the Leviathan gas field off Israel, where the first stage of developing 19 trillion cubic feet of gas will involve sales within Israel. A final investment decision is expected in late 2015 on a floating LNG project for the first stage of exports.
"That opportunity does bring forward our production growth by a few years," Coleman said, referring to the domestic gas sales in Israel.
The floating plant could be used both for exports of LNG to Asia as well as sending gas by pipeline, with exports to Turkey, Cyprus, Egypt and Jordan under consideration.
Woodside's underlying profit in 2013 fell to $1.702 billion from $2.06 billion. Analysts had expected an underlying profit of $1.85 billion, according to Thomson Reuters I/B/E/S.
The decline was due to a 9 percent fall in the average price it received for its oil and gas, as the mix of sales was skewed more to gas and costs rose due to production from the Pluto liquefied natural gas project in Western Australia.
Net profit fell 41 percent to $1.749 billion, as the 2012 result was boosted by the sale of a stake in the Browse LNG project and the 2013 result was hit by $256 million in writedowns on some oil and gas fields, flagged in January.
Woodside reaffirmed it expects to produce 86-93 million barrels of oil equivalent (mmboe) in 2014, compared with 87 mmboe last year.
Coleman said the company was looking for acquisition opportunities to boost its volume growth, but said attractive targets were limited.
"What's out there in the market place - most of the volume production is pretty fully priced," he said, while adding that potential targets in North America may be cheap but that was because production was a long way off.
Woodside's shares slipped 0.4 percent to A$38.34 against a 0.4 percent rise in the broader market.
(Reporting by Sonali Paul; Editing by Richard Pullin)
((Sonali.Paul@thomsonreuters.com)(+61 3 9286 1419)(Reuters Messaging: sonali.paul.thomsonreuters.com@reuters.net))
Keywords: AUSTRALIA WOODSIDE/RESULTS