Woodside blamed the lower production of 15.6 million barrels of oil equivalent in the quarter on natural field decline and operational issues.

But production was still 8.8% higher than the cyclone-affected March quarter, due to a full quarter’s contribution from the Chinguetti oil project in Mauritania and improved weather at the North West Shelf.

Meanwhile, high oil prices have translated into $A848 million worth of sales revenue – 27.2% higher than the 2005 second quarter.

The company also achieved a record first half revenue result of more than $A1.5 billion. This 26.3% on-year increase was due to higher commodity prices, it said.

Woodside has also boosted the estimated gas reserves at its Pluto discovery by 14% to 4.1 trillion cubic feet. The upgrade follows its Pluto-4 appraisal well confirming the northern extent of the field, the company said.

While the positive 2Q results bode well for the company, the Australian newspaper reported today that Woodside was in danger of missing its internal profit targets following a string of production and exploration problems.

The newspaper said it had learnt from internal sources that Woodside was aiming for a record profit in 2006, with the challenge of topping $1 billion in the second half alone.

It added that the company’s board has ordered heavy cost cuts to ensure Woodside can maximise returns from high oil prices.