Woodside Matters

I think WPL's announcement yesterday is the official public commencement of the resolution to this matter. Todays AFR article hints as some of the unofficial negotiations being undertaken.

A couple of matters that may explain WPL's announcement.

1). PC's new boss (Richard Goyder) commences as a director at WPL on 1 Aug 17 with him taking over the Chairman's role in April 18. I am sure PC is starting to look over his shoulder and start thinking how he is going to explain the situation in Senegal and not have to be in a position to explain the possible reduction in Woodside's Reserves and Resources.

2). WPL's reserves published in their 2016 Annual Report show their need for Reserve replacement. Their 2P Oil is 74.4 MMbl but annual production is 6.7 MMbl. So assuming full production that is a life of just over 11 years. The 2C (Resources) included for SNE are 150 Mmbl.

So if WPL do not secure SNE they are have some reserve and resource replacement issues for their oil business.

AIMO and DYOR.

It will be an interesting few months.