(Reuters) - Woodside Energy ( WDS ) and Santos, Australia's top oil and gas producers, are expected to log a modest fall in annual earnings, with investors seeking more clarity on dividend payouts amid lingering execution risks to key growth projects.

The primary reason for an annual profit decline will be softer energy prices, according to John Lockton, head of investment strategy at Sandstone Insights.

"Flat volumes combined with flat energy prices leave revenue growth flat (for both companies)in US$ terms," he told Reuters.

Woodside is forecast to report an underlying net profit of $2.96 billion for fiscal 2024, according to Visible Alpha consensus estimates, down from $3.32 billion last year.

In a line-item forecast released on Monday, Woodside said it expects higher restoration costs for the year, along with "other expenses" of $1.7 billion to $1.9 billion - both much higher than consensus estimates.

Doubts about the company's growth projects have been heightened by its projection for its Sangomar project in Senegal to maintain a production plateau into the second quarter of 2025.

"Higher restoration costs will see cash flow downgrades, and the potential earlier Sangomar decline would also be a cash drag. This will raise questions about the sustainability of the payout ratio," Citi analysts said in a note.

Woodside is also yet to assess whether potential tariffs would have a negative impact on a stake sell-down for its Louisiana liquefied natural gas (LNG) project, said analysts at Jarden, as investors wait for evidence the company is controlling costs.

Woodside fully owns the Louisiana LNG project after its $1.2 billion acquisition of developer Tellurian Inc in October but is looking to sell a 50% stake.

For smaller peer Santos, the focus will be on construction progress of its Pikka Phase 1 project in Alaska, with investors looking for indications whether acceleration of first oil production into late 2025 is possible, Jarden analysts said.

Last month, Santos said first gas from its nearly completed $4.3 billion Barossa project is expected in the third quarter this year.

"We see some risk that Santos' production and capital expenditure estimates from its legacy fields are too optimistic and may need to be rebased," Sandstone's Lockton said.

"Santos' new capital management policy, which should lift distribution per share payments by around 20%, will also be on display."

Santos is expected to report an annual underlying profit of $1.32 billion, according to consensus estimates, lower than last year's $1.42 billion.

Santos and Woodside are due to release their annual earnings updates on February 19 and February 25, respectively.