Unless Woodside can lock in very high long-term contract prices...

Unless Woodside can lock in very high long-term contract prices and the capping of risk for project cost blowouts (which are guaranteed when we are at the start of a broad commodities and skilled labour inflation cycle), the focus should be on maximising returns to shareholders. After the BHP merger there will be a lot of opportunities for incremental, high cash-flow oil projects which should be the immediate focus of capex.

Another option would be to pick up the excess Oil Search assets in PNG that Santos wants to offload, or even Dorado (ACCC probably would not like WPL and STO sharing Dorado). Both projects have shorter lead times, lower capex intensity and established partners.

The reason why US and Canadian O&G producers are trading at higher multiples is because they have slashed capex, run super lean operations and return free cashflow to shareholders (Canadians have the luxury of current oil production that will not start depleting for another 10-15 years). ESG pressure is larger in north America, it's just an excuse that Australian producers use to avoid blame for poor returns (we have Federal and state governments very supportive of O&G, US and Canada have the opposite). This point is shown by the difference in WPL and STO share price moves in the last six months. WPL is up double STO because it is returning much more FCF to shareholders. Disclosure - I own WPL and STO.