wpl to double oil/gas output, page-2

Interesting X

The AFR has a similar article but also mentions the fact that the exploration and possible acquisitions??? will be funded from cash flow or debt.. ie NOT Capital, with a continuation ofd the divi policy... all things the punters like to hear, including me.. lol

There spend on oil and gas projects, for this financial year, will be $3.7Billion.

Heres the full article:
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Woodside to get big or get out

Nov 18
Ian Howarth

Woodside Petroleum has given the strongest hint yet that it may quit petroleum exploration in the Gulf of Mexico, the same region where BHP Billiton and others have found billions of barrels of oil.

Stockbroking analysts were told yesterday that if the company could not quickly build up a dominant position in the Gulf of Mexico, it might abandon the region in favour of areas where it can be a major player.

Woodside strategic planning director Betsy Donaghey said the company's position in the Gulf of Mexico did not measure up against its internal investment strategy.

A key plank of its global operating strategy is for Woodside to develop regional hubs, based on oil or gas assets, which it can use to gain market leverage in a wide area.

After a major review of its asset base, Woodside believed that "what we have there [in the Gulf of Mexico] ... does not meet our hub criteria", Ms Donaghey said.

"We will either make it work or we will get out."

But Ms Donaghey told the analysts that the Gulf of Mexico remained a "fantastic place to do business" and that Woodside was "still working hard to make the Gulf of Mexico work for us".

Chief executive officer Don Voelte said Woodside, which plans to spend $3.7 billion in the present financial year building oil and gas projects, was also set to commit several more billion dollars on new projects in the new year.

That did not include any money that might be spent on acquisitions, he added, without revealing whether any present acquisitions were being studied.

The group's interim chief financial officer, Troy Hayden, said all the cash to be spent by Woodside in the next few years would be generated from either internal cash flow or from debt.

He said Woodside had no plans to raise money from the equity markets and added that the company planned to maintain its dividend policy despite its massive expansion phase.

He said that raising $US250million ($323million) through the US bond market last year, Woodside might consider issuing a 30-year bond in the US to raise large amounts of future capital.

The bond would be based on Woodside's very long-term cashflow profile, backed by the North-West Shelf liquefied natural gas project, which has only used one-third of the presently known gas reserves.

Woodside is now rapidly developing plans, the company revealed yesterday, to build a new, 7million tonnes a year LNG plant on the West Australian coast north of Broome, using gas in the Brecknock and Scott Reef fields in the Browse Basin area.

Woodside's director of gas and commercial, David Maxwell, said yesterday customers were already expressing keen interest in new LNG supplies from Australia and that the Browse LNG project could be in operation by 2011 or earlier if customers were secured in time.

But Mr Maxwell signalled that Woodside and its partners were close to placing the entire Sunrise gas field development on hold unless the political impasse between Australia and East Timor was resolved.

"Agreement between Australia and Timor Leste is vital or it [the Sunrise project] will stall. That looks like the most likely scenario," MrMaxwell said.

He said if a political settlement were achieved, Sunrise could be developed and in production within five years of moving into the "basis of design" phase.

A full feasibility study into Sunrise has been completed, with "basis of design" the next step.