Biggest share spike in four years as Woodside declares special dividend Woodside chairman Michael Chaney says the move to return more profit to shareholders is appropriate. Picture: Kerris Berrington Source: The Sunday Times WOODSIDE has unveiled plans for a bumper payout to investors, sparking the biggest one-day share price surge for the cashed-up energy group in more than four years. Shares in the oil and gas producer jumped almost 10 per cent yesterday after the company announced it would issue a US63c (61c) special dividend and look to return more profit to shareholders in coming years. It was the group's biggest one-day rally since November 2008 and added about $2.8 billion to Woodside's market capitalisation. The payout comes after Woodside announced earlier this month that it was dumping plans for a $40 billion gas processing plant at James Price Point on the Western Australian coast. It also follows the revelation in February that the Perth-based company had doubled its full-year profit as production started at its $15 billion Pluto liquefied natural gas site. Chairman Michael Chaney said the move to return more profit to shareholders was appropriate given the company's strong revenue growth, lower debt levels and long lead times on future projects. Mr Chaney said Woodside would increase its dividend ratio from 52 per cent to 80 per cent of underlying net profit after tax, while conditions allowed it. "At the same time we shall continue to pursue growth opportunities where we believe they will create value for shareholders," he said. Woodside is in the early stages of developing new projects in Israel and Myanmar. It has also vowed to exploit gas reserves in the Browse Basin, off the WA coast, using a floating LNG processing plan or other alternative models. Deutsche Bank analyst John Hirjee said the company was well placed to maintain its higher dividend payout for up to three years. He estimated the cash splash on investors would double the yield on Woodside stock from 3.8 per cent to 7.6 per cent this year. Morningstar analyst Mark Taylor said while the company had gone back to the drawing board on Browse, it still had a number of longer-term growth options. "Investors will enjoy this dividend and it will also have a positive effect by showing discipline," he said. It means they are not going to be spending capital on projects at the high end of the construction market. Woodside will pay its fully franked special dividend on May 29 to shareholders registered at May 6. The company's share price closed 9.7 per cent, or $3.36, higher yesterday at $37.96.