Woodside Petroleum Ltd|Financial Statements 117
for the year ended 31 December 2018
In this section
This section addresses cash, debt and the capital position of the Group at the end of the reporting period including, where applicable, the
accounting policies applied and the key estimates and judgements made.
C. Debt and capital
C.1 Cash and cash equivalents Page 118
C.2 Interest-bearing liabilities and financing facilities Page 118
C.3 Contributed equity Page 119
C.4 Other reserves Page 120
Key financial and capital risks in this section
Capital risk management
Capital management is undertaken to ensure that a secure, cost-eective and flexible supply of funds is available to meet the Group’s
operating and capital expenditure requirements. A stable capital base is maintained from which the Group can pursue its growth
aspirations, whilst maintaining a flexible capital structure that allows access to a range of debt and equity markets to both draw upon and
repay capital.
The Dividend Reinvestment Plan (DRP) was approved by shareholders at the Annual General Meeting in 2003 for activation as required to
fund future growth. The DRP has not been utilised since the fully underwritten 2015 final dividend.
A range of financial metrics are monitored, including gearing and cash flow leverage, and Treasury policy breaches and exceptions.
Liquidity risk management
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet its obligations to repay financial
liabilities as and when they fall due. The liquidity position of the Group is managed to ensure sucient liquid funds are available to meet its
financial commitments in a timely and cost-eective manner.
The Group’s liquidity position is continually reviewed, including cash flow forecasts, to determine the forecast liquidity position and
maintain appropriate liquidity levels. At 31 December 2018, the Group has a total of US$3,918 million (2017: US$2,942 million) of available
undrawn facilities and cash at its disposal. The maturity profile of interest-bearing liabilities is disclosed in Note C.2, and trade and other
payables are disclosed in Note D.3. Financing facilities available to the Group are disclosed in Note C.2.
Interest rate risk management
Interest rate risk is the risk that the Group’s financial position will fluctuate due to changes in market interest rates.
The Group’s exposure to the risk of changes in market interest rates relates primarily to financial instruments with floating interest rates
including long-term debt obligations, cash and short-term deposits. The Group manages its interest rate risk by maintaining an appropriate
mix of fixed and floating rate debt. To manage the ratio of fixed rate debt to floating rate debt, the Group may enter into interest rate
swaps. The Group holds cross-currency interest rate swaps to hedge the foreign exchange risk (refer to Section A) and interest rate risk of
the CHF denominated medium term note.
At the reporting date, the Group was exposed to various benchmark interest rates that were not designated in cash flow hedges,
US$1,536 million (2017: US$84 million) on cash and cash equivalents, US$617 million (2017: US$1,020 million) on interest-bearing liabilities
(excluding transaction costs) and US$12 million (2017: US$11 million) on cross-currency interest rate swaps.
A reasonably possible change in the USD London Interbank Oered Rate (LIBOR) (+1.0%/-1.0% (2017: +1.0%/-1.0%)), with all variables held
constant, would not have a material impact on the Group’s equity or the income statement in the current period.