MELBOURNE, Feb 22 (Reuters) - Woodside Petroleum Ltd WPL.AX reported a 23 percent drop in annual underlying profit, hit by weaker oil and gas prices, but said it expects output to rise by about 15 percent over the next three years.
Australia's top independent oil and gas producer said net profit before one-time items for 2016 fell to $868 million from $1.126 billion a year earlier, which was in line with analysts' forecasts, according to Thomson Reuters I/B/E/S.
It cut its full year dividend to 83 cents a share from $1.09, slightly short of analysts' forecasts of 85 cents a share.
It has flagged that it expects production to fall to between 84 million and 90 million barrels of oil equivalent (mmboe) this year from 94.9 mmboe in 2016, mainly as it will no longer have a share of domestic gas output from the North West Shelf.
Looking to expand demand for its key product, liquefied natural gas (LNG), in an oversupplied market, Woodside said it is planning to build infrastructure to supply LNG from its Pluto field off Western Australia to fuel the local mining and shipping sectors.
The company also said it is considering "mid-scale or large-scale expansion" of its Pluto LNG operation.