Australia's Woodside Petroleum Ltd significantly hiked its final dividend despite reporting lower-than-expected annual profit on Thursday, underpinned by higher oil and gas prices and the ramp-up of its Wheatstone project.

The country's top oil and gas producer posted a net profit of $1.36 billion for 2018, up from $1.07 billion in 2017, but lower than analysts' estimate of $1.45 billion, according to Refinitiv.

Woodside raised its final dividend by 86 percent to 91 cents per share, and said it will pay an annual dividend of 144 cents per share, which was higher than the expected 135 cents.

The company's underlying net profit after tax came in at $1.42 billion, slightly lower than estimates by Refinitiv of $1.45 billion, but higher than a year earlier.

With an eye on growth, Woodside in January pledged between $1.6 billion and $1.7 billion towards projects this year, much higher than analysts' expectations.

The majority of those funds will flow into early work on its Scarborough and Browse projects and an expansion of Pluto, with the former two being key to Woodside's growth in the next decade.

Growing confidence in those projects has allowed the Perth-based company to nearly halve its planned exploration spending in 2019.

"Our growth plans will more than double Woodside’s equity LNG production by 2027," said Chief Executive Officer Peter Coleman said.

However, Woodside faces headwinds from volatile oil prices, which could crimp its financial outlook.

Last month, the company said it expects to churn out between 88 million barrels of oil equivalent (mmboe) and 94 mmboe in 2019.

(Reporting by Nikhil Kurian Nainan and Aditya Soni; Editing by Susan Thomas and James Dalgleish)