Oil and gold have been two very popular trading commodities (along with copper) for financial speculators such as hedge funds and other big funds.
Gold is also a more popular commodity for smaller traders, while share market investors haven't minded companies operating in either area.
But as we have seen over the past month, the subprime mortgage crisis and credit market problems have shaken quite a few investors from the trees in most investment areas. Gold and Oil are no different.
Gold is off around 4% over August, oil is down around $US9 a barrel in the same time.
For Woodside Petroleym (WPL), the country's second biggest oil group, the volatility since July 1 has probably rattled a few cages but it was a different story in the first six months of the financial year to June 30 when WPL saw an increase in earnings of just over 16%.
The oil and gas producer reaffirmed that it is on track to meet its production forecast for the full-year, echoing the confidence expressed in the first half production report last month.
Woodside posted a first reported half profit of $610.1 million, compared to the $524.35 reported in the first six months of 2006.
The company said that underlying net profit in the six months to June 30 rose 10.6% to $545.4 million.
"Production of 35.0 million barrels of oil equivalent (MMboe) was up 17.1% compared to the previous corresponding period. The increase in profit was primarily a result of increased production and the sale of Legendre equity which outweighed negative impacts from a stronger Australian dollar and higher depreciation."
As we saw with the production report, it was higher output and sales from its Enfield and Cossack Pioneer fields in Western Australia, and the sale of Legendre in WA, which helped drive the higher profit.
The company said first-half oil and gas revenue rose 19.2% to $1.9 billion, net operating cash flow jumped 58% to $1.4 billion and an unchanged interim dividend of 49 cents, fully franked, was declared.
Woodside said it was on target to meet its full-year forecast of 72 to 78 million barrels of oil equivalent (mmboe) for calendar 2007.
The oil and gas producer suggested that the construction of a fifth liquefied natural gas (LNG) supply train at the North West Shelf Joint Venture (NWSJV) was facing a second cost overrun.
The original price tag for the expansion was $2 billion, but soaring industry costs prompted Woodside to revise that figure last September to about $2.4 billion.
Woodside said "cost pressures, prevalent throughout the industry" had impacted the project with the final cost expected to be "under $2.6 billion".
That may have led to a nervy day of trading yesterday: the shares hit a low of $40.27 and a high of $41.90 and ended one cent down at $40.99.
Cost overruns on the project have been a worry for some investors for more than a year now.
The fifth train is due for completion by the end of 2008. It will add 4.4 million tonnes of production capacity, taking total production to 16.3 million tonnes.
Woodside also flagged a 20% cost overrun for the $1.1 billion Otway project in Victoria.
Otway has been dogged by construction delays and was expected originally to begin producing earlier in the year.
Woodside forecast first gas sales from Otway in September but indicated "cost pressures due to the delay" would push the total development cost to around 20% over budget.
The company again flagged that it was looking at quitting the disappointing east African businesses.
"Production from the Chinguetti field has continued to decline. During the first half 2007, production averaged over 15,000 bopd with remedial work on gas lift equipment required. New 4D seismic data has been acquired to assist with identification of production optimisation opportunities. Woodside will continue to explore all avenues to maximise the value of its Mauritania business.
"Woodside's strategy is to maximise value from its Foundation and Complementary Business, whilst focusing on building its Global LNG Business. Consistent with this, Woodside continues to monitor its areas of focus and review its asset portfolio. In particular, Woodside is considering a range of options in relation to its African assets which may include an exit," the company said.
Meanwhile Lihir Gold Ltd has had a rough introduction to the world of being an unhedged gold producer, although, to be fair, the loss was due to the hangover of its previous strongly hedged position.
But it is looking to a 'strong' second half profit for the year.
The bottom line net loss for the six months ended June 30 was $US53.1 million ($A66.4 million).
But the gold producer's operating profit was $US94.7 million ($A118.3 million), up 45% on the first half of last year.
The company reported operating cash flow of $49.8 million, up from $43.9 in the prior June half and revenues of $235.3 million, up 32% from $177.7 million in the prior corresponding half year
It says it cut total cash costs to $282/oz, compared with $312/oz for the six months to June 2006.
Lihir managing director, Andrew Hood, said the financial restructure undergone by Lihir in the half, including a $1.2 billion capital raising, had allowed it to close out its hedge book and to repay a 480,000 oz gold loan.
"These transactions leave the company in a strong financial position and fully leveraged to the gold price," Mr Hood said.
"The restructuring led to a number of one-off costs in the period, in particular a $US117.9 million pre-tax loss on the early repayment of the gold loan.
"These costs contributed to a reduction in the bottom line result to a net loss of $US53.1 million.
"In the absence of the loss on rep