* Holds on to $2.68 bln in cash for growth
* Net profit rises to $1.1 bln, meets forecasts
* Hikes dividend 34 pct to 111 cents a share (Adds CEO comment, revenue, share price performance)
MELBOURNE, Aug 20 (Reuters) - Woodside Petroleum Ltd delivered a 27 percent rise in half-year net profit on Wednesday, in line with market forecasts, as output from the Pluto liquefied natural gas project increased and prices rose.
Woodside held back on returning capital to shareholders beyond a 34 percent increase in its dividend, despite holding $2.68 billion in cash after shareholders rejected a plan for it to buy back part of its top shareholder Royal Dutch Shell's stake in the company.
Instead, Australia's biggest oil and gas producer touted its cash on hand and $1.6 billion in debt facilities as a source to fund growth.
"We continue to only pursue those opportunities where we see value for our shareholders," Woodside Chief Executive Peter Coleman said in a statement.
Woodside gave no outlook for the rest of the year, other than to reaffirm its recently raised raised production target of 89 to 94 million barrels of oil equivalent (mmboe).
Net profit rose to $1.11 billion for the six months to June from $873 million a year earlier, in line with estimates of around $1.1 billion from four analysts. It announced an interim dividend of 111 cents a share, slightly higher than some analysts' forecasts.
Revenue rose 24 percent to a record $3.6 billion, thanks to higher selling prices for its Pluto LNG and bigger volumes as Pluto output proved more reliable and production resumed at its Vincent field.
After scrapping a deal to buy a 25 percent stake in Israel's massive Leviathan gas field earlier this year and with strong cash flows from Pluto LNG, the company is under pressure to make an acquisition to fill a gap in its growth prospects ahead of the development of its next big project, most likely the Browse floating LNG project.
Without an acquisition, it is counting on a fresh push in exploration to build up its reserves, having recently picked up acreage in Myanmar, Morocco, Tanzania and Gabon.
Woodside's shares have risen 9.9 percent this year, outperforming a 4.4 percent rise in the broader market.
Reporting by Sonali Paul; Editing by Richard Pullin