Woodside Petroleum Ltd| Operating and Financial Review 21
Balance sheet, liquidity and debt service
We reinforced our strong balance sheet, reducing our gearing
to 12%, within our 2018 target range of 10-30%. We ended 2018
with net debt of $2,397 million and a robust liquidity position of
As a result of implementing AASB 16 Leases (AASB 16) from
1 January 2019, we will increase our target gearing range
to 15-35%. The implementation of AASB 16 will not impact
Woodside’s strong credit ratings of Baa1 and BBB+, both of
which were rearmed during the period by Moody’s and S&P
Global respectively with a stable outlook.
We continue to actively control our debt portfolio by
minimising near-term maturities and maintaining a low cost
of debt. The average term to maturity is 4.7 years and our
portfolio cost of debt remains competitive at 3.9%.
We restructured our debt portfolio in 2018, in order to minimise
interest expense incurred. The restructure included:
+Redemption in May 2018 of a ten-year $600 million Rule 144A/
Regulation S senior unsecured bond, prior to the original
maturity date of 1 March 2019.
+Cancelling a number of bilateral facilities totalling $700 million.
Our investment expenditure guidance for 2019 is $1,600 million
to $1,700 million.
We are increasing expenditure on our growth projects
including Scarborough, Pluto LNG Train 2, Browse to North
West Shelf Project and SNE Field Development Phase 1.
Expenditure for the Greater Enﬁeld Project will reduce ahead
of expected ﬁrst oil in mid-2019, and work will continue on the
Wheatstone Julimar Phase 2 development.
Exploration expensed and capitalised in 2019 will reduce
to approximately $200 million, from $310 million in 2018.
For 2019 the expected impact on NPAT is $30 million for
a $1 movement in the Brent oil price, and $6 million for a
$0.01 movement in the AUD/USD exchange rate.
We will actively manage our debt portfolio in 2019.
Undrawn debt facilities
1. Growth includes Scarborough, Pluto LNG Train 2, Browse to NWS Project, SNE Field
Development (Senegal), Myanmar, Kitimat and other spend.
2. Base business includes Pluto LNG, Pluto-NWS Interconnector, NWS Project,
Australia Oil and Corporate.