Australia's top-ranked oil and gas company Woodside has reported strong financial results for 2021 and is expecting to complete its acquisition of BHP's petroleum business in early June.

The company said its underlying net profit after tax of US$1.6 billion was up 262% on the 2020 financial year.

Operating revenue was $6.9 billion, up 93% year-on-year, while free cash flow was $851 million.

The dramatic improvement in oil and LNG prices underpinned the strong results.

The company had cash on hand of $3 billion, and reported a unit production cost of $5.3 per barrel of oil equivalent.

Net debt at the end of 2021 was $3.77 billion with gearing of 21.9%.

Chief executive Meg O'Neill said November 2021 could be recorded as "the most remarkable month in Woodside’s 67-year history, with the agreement to merge with BHP’s petroleum business and the final investment decisions on the Scarborough and Pluto Train 2 projects".

“The value-creating decisions taken in 2021 are expected to transform Woodside, consolidate our financial strength, diversify our portfolio and enable us to thrive through the energy transition."

Completion of the merger is targeted for early June 2022, subject to a Woodside shareholder vote on the transaction targeted for 19 May 2022.

The all-stock merger will create a company with a combined market capitalisation of close to US$29.9 billion, and the combined business will have a conventional asset base producing about 200 million barrels of oil equivalent per year.

The BHP portfolio includes iconic Australian assets like the North West Shelf LNG project, Scarborough and Bass Strait.

Its international portfolio includes US Gulf of Mexico producing fields and development projects, while BHP’s Trinidad & Tobago and Mexico host excellent opportunities.

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