Woodside Energy Group Ltd (WDS) 2008 Q4 法說會逐字稿

Good afternoon. I'm Don Voelte. With me today are Mark Chatterji, CFO, his finance group, some of our IR folks, Rob Cole, Corporate Centre, and Agu Kantsler from our exploration group.

2008 was a good year for Woodside. We delivered outstanding results, a record full-year dividend, profit, revenue, cash flow, and production. This stands us in good stead to weather the current economic environment, and I'm pleased be able to tell you that, while other companies in our industry are shutting in operations and cutting down activities, we're maintaining our development in all of our core portfolio assets.

And to cut to the chase, we fully intend to deliver Pluto on schedule at the end of 2010. Within a few days, we will be it 50% completion of the Pluto greenfield and Train 1 project.

Of course, we are, as always, very conscientious of our financial management, and Mark is here to talk to you a little bit more about that in a few minutes. But the key message is, is that despite the softening of commodity prices, we will manage our funding so that we can continue to grow and deliver the long-term returns that we've promised to our shareholders.

One more thing before we jump in here. Earlier this year, we unveiled a change to our logo. The change is intended to place a greater emphasis on the future of our liquified natural gas business and continue to acknowledge our foundation oil and gas project. That was the first substantial change we've made in 32 years, and I'll tell you, it's about the only thing I remember in five years that everybody at Woodside seems to unanimously agree that was a good thing.

Moving over slide 2. Our usual disclaimer applies. No changes in it from last time.

Turning to slide 3. As you can see from our results, we've continued to build on the growth of the last few years and delivered record performance in all of the metrics on this slide. Our 15% jump in production to over 81 million barrels of oil equivalent builds from last year's increase and represents the fourth consecutive year of annual growth.

We've had a 56% growth in revenue to just under AUD6 billion, and this represents the fifth consecutive year of increase. And our cash flow is up at AUD3.78 billion, again the fifth straight year of increase. Our record reported profit comes in at AUD1.79 billion, with an underlying profit of AUD1.8 billion, the fourth increase in the last five years.

Going over to slide 4. As promised, our driver for our production growth can be seen in the list of new producing assets on this slide. Our Train 5 and Angel producing facilities in the North West Shelf have listed total production capacity at the Karratha gas plant to 16.3 million tons per annum of LNG.

Now, after a flawless start-up and ramp-up, Train 5 is currently running at between 80% and 90% of its full capacity. Now we expect that to achieve to its full design rate after our shutdown that we're going to take in May to fix the main cryogenic heat exchangers. And that's moved up from the last time we told you in November.

The start-up of Neptune and Power Play production in the Gulf of Mexico more than doubled our U.S. net production volumes from the beginning of the year. Now we had some trouble with the start-up of Vincent, offshore of western Australia, a completion fluid issue. However, by year end, we had ramped it up to around 35,000 barrels of oil per day and it's even doing better now, today.

Our intervention work on Enfield was very successful, with three new site tracks having lifted their oil production. Enfield and Stybarrow are now both exceeding our initial expectations of what the reservoirs would do at this time.

Onto slide 5. It's been a very busy year for us on the development front, as I've mentioned. We [forgrave] the construction of the greenfield Pluto and Train 1 to just under 50% at this time. In a few days, we will reach that milestone of halfway finished.

As you'll see later on, we have most of the foundations in place and we're beginning to place the first modules, which started arriving during the fourth quarter of last year. Now I'll talk more about Pluto 1, Pluto 2 and 3, Browse, and Sunrise later in the pack, but I do want to mention that we continue to build our world-class assets at North West Shelf.

Our North Rankin redevelopment is 23% complete and our Northwest oil redevelopment, which will enable production through the next decade, is now 18% complete. I just want to draw your attention to the fact that we continue to build -- continue to deliver future value despite the current adverse economic conditions.

On slide 6, I just want to mention here about people, contractors, how we do our business. A very important event happened to us a couple weeks ago, two weeks ago. It was over a long weekend. I and 30 of my senior operating project and development management team met with 70 senior leaders, including many CEOs, representing 35 of our biggest contracting partners at a very successful safety engagement session.

This group of companies comprise over 90% of our spend and construction hours. I invited this key group of contracting partners to share their opinions, thoughts, and experiences on how we can make our Woodside worksite safer now and in the future.

Also making appearances were our Chairman, Michael Chaney, Commonwealth Minister Martin Ferguson, WA Minister Norman Moore, and the onshore and offshore safety chief regulators. I was extremely pleased with this overwhelming enthusiasm and basis for action from those attending, in bringing about a step change in the safety in all of our Woodside worksites.

Now, there is a number of immediate actions I'm taking to improve this performance. First, the health and safety function will report directly to me. I'll be taking a greater personal leadership role and that takes place with immediate effect.

Second, there's going to be a greater focus at all levels of safe -- of our staff and contractor workforce engagements on safety as a core company and contractor value.

Third, we're going to create a more caring front-line workplace, where everybody has the same message and the same focus on safety.

As a Company, we have recommitted, along with our contractors, to achieving our health and safety aspiration of no one gets hurt and no incidents.

Now, in terms of our employees and our workforce here at Woodside, I'm also pleased to share that we've conducted another survey -- employee survey in 2008 and that survey indicated that our staff would probably work for Woodside and even more committed to our success, which is borne out by the continuing downward trend in our voluntary turnover.

Going to slide 7, on reserves, as you can see from this slide, as a result of production, drilling activity, studies, acquisitions, divestments during 2008, Woodside's proved reserves increased by over 100 million barrels during the year to 1.33 billion barrels of oil. The corresponding proved plus probable 2P reserves grew by over 15 million barrels to 1.7 billion barrels of oil equivalent.

Now approximately 80% of both our reserves and our contingent resources are natural gas. You'll notice that, largely as a result of the maturing Browse subsurface evaluation appraisal, our total contingent resources are now 1.9 billion barrels of oil equivalent. Now that's a P50 figure, which is a result of narrowing the range of uncertainty on the Browse field, as well as through the transferring of some Xena volumes into reserve category.

Speaking of Xena, we are now well along with our drilling at our Pluto development wells and the only surprises we have had have been very pleasant surprises. We've had significantly improved our P90 reserves by 0.9 TCF and have firmed our P50 position, all great results that reduces any type of reserve risk we might have had with the project.

Overall, this year has been a good one in terms of reserves. A new reserve booking for Xena and increased volumes at Pluto mean that, even though we had a 15% increase in production this year, we still have a reserve life of 17 years approved and 22 years of proved plus probable confidence levels, respectively.

If contingent resources were commercialized and considered along with reserves, 2008 production levels could be maintained for another 46 years.

Now, as you all are waiting for, really important this year is our financial condition. So I'm going to turn it over to our CFO, Mark Chatterji, to bring you up to date.

I'm going to run through the building blocks of our results, and then turn to funding our 2009 activities. We'll start with production, which is page 9 of your presentation pack.

2008 was another record year of production for Woodside. The 81.3 million barrels of oil equivalent we produced in 2008 was a 15% increase from 2007.

The production increase came from a suite of new projects Woodside brought online in 2008, also from getting a full year of production from Stybarrow and Otway, which were both started towards the end of 2007, and finally, purchasing Shell's equity interest in North West Shelf oil in May of 2008. As you can see from the chart, since 2004, we've increased production 42%.

Moving on to revenue and that's on page 10 of your pack, we had a 56% increase in revenue compared to 2007, due partly to the strong production growth, which I discussed in the previous slide, and partly to the increase in commodity pricing over the year.

The average WTI oil price for 2008 was just short of $100 per barrel, versus around $72.50 a barrel for 2007. Now, some of this oil price increase was offset by our Greater Enfield Area hedging program, just as this year, some of the oil price decrease is being offset by the Greater Enfield Area hedging program.

Finally, although the slide mentions exchange rates, the effect on revenue for 2008 was de minimus. The average FX exchange rate for both 2007 and 2008 was about AUD0.84. The impact of the exchange rate was lowered down on the P&L and we will discuss that in a few slides.

Moving on to slide 11, oil production costs rose from AUD133 million to AUD245 million, which equates to lifting costs for oil rising from AUD5.87 per boe to AUD7.77 per boe. Gas production costs rose from AUD134 million to AUD186 million, which equates to gas lifting costs rising from 2.93 of boe to 3.93 of boe.

Starting with oil, part of the increase in cost was from new production of Vincent and Neptune. However, as we discussed in the half-year, in addition there were about AUD47 million of cost that we expect to be nonrecurring in nature, namely repairs and kit replacement at Laminarea and Mutineer Exeter, and also the intervention work that was successfully accomplished at Enfield.

When you strip out these items, as we have done on the dotted line, that gives you a figure of AUD6.20 per boe.

For gas, part of the increase in cost was from the start-ups at Train 5 and Angel. Furthermore, as we've noted in previous calls, the North West Shelf has really been going through a phase of intensive maintenance at both the onshore facilities in Karratha and offshore. After all, these facilities expect to be producing and liquifying gas for decades to come.

Looking ahead to 2009, we expect that higher throughput of gas, particularly at North West Shelf, will begin to flatten or even bring down our gas lifting costs in Australia. For oil in 2009 -- this is still looking forward -- we have a number of fields that are now in natural decline, so that while maintenance costs might stay relatively flat, lifting costs are expected to rise as a result of reduced volumes.

Moving on to the next slide, that's cost comparison, this page shows the view of JS Herold as it benchmarks various types of costs. Woodside's 2007 performance is shown in red. As you can see, we tend to benchmark towards the top of other IOCs in the LNG business.

Now, I understand that lifting costs, as shown on the slide, include for us PRRT. And, of course, that affects Woodside disproportionately as the group that it's being compared to, as very few of them have any PRRT exposure.

Going on to cash flow with page 13, despite the movement in costs on the previous slide, Woodside saw strong growth in its operating cash flow in 2008. This was an important factor in our being able to fund requirements for the latter half of 2008 without raising additional debt. Also similar to production, this continues the trend of growth and cash flows for the Company over the past several years.

Turning to profit, page 14, profit at AUD1,786 million for 2008. Reported profit was 73% higher than it was in 2007. The slide that you see walks through the variance analysis between the two years. Now, revenue we've already discussed.

The variance in cost of sales not only accounts for volume and price-driven higher production costs in DD&A, but also accounts for an increase in royalty and excise caused by the Commonwealth's decision in May to slap a new tax on North West Shelf condensate. Now that move cost the Company over AUD100 million.

The other large item I want to note is occurring in the other expense bar. This is the revaluation of our U.S. dollar debt. The brief explanation. While the Company reports its results in Australian dollars, it has both investments and loans in U.S. dollars. So changes in the Australian dollar to U.S. dollar exchange rate cause us to revalue both the investments and the loans.

Some of these investments offset the loans, but the non-offsetting balance goes to the P&L statement. This is not a new accounting policy. We've had it for years. However, this year, the combination of increasing U.S. dollar liabilities, such as the [Jada] facility in midyear, decreasing U.S. dollar investments caused by the sale of Mauritania, and the sharp fall in the exchange rate from the end of the first half to the end of the second half caused a movement of almost AUD300 million in the P&L.

If you look back in the appendix, there is another explanation or -- an illustration of the debt revaluation and how it occurs, but I'll caution you, and you'll see this in the appendix, it is impossible to forecast the debt revaluation in advance because, as you will see from the slide in the appendix, there are a lot of moving parts that aren't actually known until we balance books every month.

Also, another [extension] in our decision to suspend OceanWay, and write off AUD87 million of costs incurred since 2005 to move to California permitting [long]. Offsetting these other expenses -- items were lower E&E costs.

The final item to keep in mind in the variance analysis is that, in 2007, we included the impact of discontinued operations caused by Woodside's exit from Mauritania, which were absent in 2008.

Next slide is significant items. You can see that Woodside's 2008 underlying impact was AUD1,832 million, the largest difference being the OceanWay suspension I mentioned on the previous slide.

On to dividends. In 2008, Woodside paid a full-year dividend of AUD1.35, which was the AUD0.80 interim dividend paid in October and the AUD0.55 final dividend that was just declared today. This is a 30% increase in the full-year dividend versus 2007.

Now this dividend will be fully underwritten by the dividend reinvestment program. As I've previously noted, our intent is that the fully underwritten DRP will remain activated throughout the Pluto construction phase.

The last slide I wanted to talk to you about is funding. Turn to funding, at the end of the calendar year, Woodside had no drawn debt against its then-existing bilateral and 364 facilities. So, in other words, we had $1.05 billion in dry powder.

Since that time, we added another $800 million of additional capacity from our banks and we intend to raise more debt on top of that. Now all this is in line with what we announced when we made the FID decision for Pluto in July 2007. We intend to fund Pluto through a combination of operating cash flow, on balance sheet debt, and equity through the fully-underwritten DRP.

Given the fall in oil prices, Woodside has decided to tighten our belt. Since the November investment briefing, management has implemented a series of reductions in budgeted spending across all parts of the Company, which total about AUD0.5 billion. This is a combination of eliminating some activity, deferring other activity into 2010, working more efficiently, and realizing benefits from a declining cost environment.

I might hesitate -- I might hasten to add that we reiterate -- our production guidance remains unchanged for the full year 2009 and, furthermore, there is no change to the guidance that we have given on our projects. A further reduction of budgeted spending of several hundred million dollars is being contemplated.

In addition, management has decided to review the portfolio to see if others may find some of the noncore assets more valuable than we do. Now by noncore, we mean assets located outside of western Australia and the Timor Sea.

What do these actions mean for our external funding requirements? If you presume that the prevailing oil prices and exchange rates will be where they are for the remainder of the year, we expect to need another $1 billion to $1.7 billion of funding beyond where we are today.

Furthermore, and let me emphasize this, we intend to source all of this funding from the debt market.

Finally, keep in mind that if the debt on offer is attractive, we may raise more than $1 billion to $1.7 billion and use the excess to repay our bilateral and other short-term facilities, so that that capacity can be used again in 2010.

Thanks for listening and now I'll turn it back over to Don to go over the outlook of the Company.

Thanks, Mark, and thanks to your folks for having a good plan to get us through this downturn and come out even stronger on the other side of it. I really appreciate everybody's efforts in the finance and tax group.

We pride ourselves at Woodside for being that Australian company that delivers. We do what we say. We don't just talk about building, we actually build and deliver. And we deliver shareholder value.

Currently, we operate over AUD20 billion of projects under construction management. We have about 20,000 to 25,000 direct jobs on our worksites every day. We have built or are building six of the seven LNG trains that have ever been built in Australia, and we're six for six in western Australia.

Now, I remember just working months ago, during our Christmas break, I received a phone call from a very senior executive of one of our North West Shelf partners. The conversation kind of went like this. Gee, Don, you're actually building Pluto. Our guys said you wouldn't do that. We thought it was a bluff, but you're actually building it. It's quite a jump for Woodside.

So last week, I got another phone call from another very senior executive from another one of our North West Shelf partners. And that was -- this person is seriously thinking about building an LNG plant in Australia, or their company is.

The conversation kind of went like this. Can it be right that you guys are almost 50% complete at Pluto? How are you guys doing that? I'm laying my projected timeline over your projected timeline; it's like a two times factor.

The point is this is a very special company called Woodside. We've built an enormous capability and capacity to do amazing things very quickly in Australia.

Building Australia is very complex. I can guarantee that. We know how to anticipate obstacles. We have seen and learned over the last 20 years how to get around some of those obstacles and tackle the ones that we need to challenge technically. And we've seen it six times over now, so we learn a lot as we go along.

That is the point. Pluto greenfield and Train 1, if we keep to schedule, will be a world record for LNG from discovery to production. The question is would it be, if it was the first LNG plant we had ever built in Australia? Let me give you the answer to that. Not even close.

There is so much knowledge stored in this Company, it's just really amazes me sometimes. To be honest, if this was the first Woodside LNG built in this country for us at Woodside, we certainly would not have the ability to build it as quickly or efficiently as we are doing Pluto. This is a unique place to build and Woodside is very, very good at it.

Now let's start on slide 19 and talk about some of these development projects. First, let's talk about production, where we're at currently. We grew our production 15% in 2008. This builds on our three prior consecutive years of growth.

Over this period, we're grown our production by 42% in this Company. Now this blows away all of our mid-cap peer official competitive companies. Most companies in this group are struggling to organically grow their production volumes.

I'll just take one example, a production from another Australian company in our official peer group. Now it declined 11% over the past few years while we have increased ours by 20%. That equates to a production growth differential of over 30% in the past 24 months alone.

So this year, we thought we'd increase the competition to see how we do, and we included all the majors and super-majors, as you can see in the top right-hand corner. And as you can see from this chart from JS Herold, same story. Woodside is a pretty unique growth story. And just wait until Pluto comes on.

Now I wanted to say this for clarity's sake, so that there is no misunderstanding. Our 2009 production guidance remains unchanged. That's 81 million to 86 million barrels. In this, we're going for our fifth consecutive year of growth.

Over on page 20, our reserves. We did the same thing with reserves. We looked at the majors and the super majors, and you can see how we're doing. We're doing very well. On the upper left-hand chart, our average organic three-year running growth of reserve replacement ratio is about three times what the rest of the big companies have produced.

And when you include acquisitions and divestments, which is in the lower left-hand corner, we still lead the pack.

On the right-hand side, you can see that Woodside's reserve to production ratio is 17 years versus 14 years for the next closest company. And when you average out all the other companies, it's about a 12-year life. Overall, things are going well.

Over to slide 21. North West Shelf LNG contracts into Japan utilize a Japan custom clearing price, called JCC, which is applied by various formulas with a three-month delay. Therefore, while the oil price declined dramatically in the fourth quarter of 2008, the fourth quarter LNG price was still strong.

In the future, there's no doubt our realized LNG price will come down as lower oil prices work through the three-month lag effect. However, due to the effect of general LNG pricing indexation for oil, our realized LNG prices will be cushioned from the full effect of a sagging oil price.

Now, while I am talking about LNG, I can advise that the pricing out of range negotiation that has progressed -- they have progressed and documentation for the 1985 [SDA] in Japan is expected to be finalized by the end of this quarter.

Onto slide 22. Let's see where we're at with Pluto. On slide 22, you see our milestone chart. Pluto greenfield and Train 1 is continuing at world-record pace. We will be at 50% complete -- completion during the next few days.

Now we're still holding to our FID budgeted schedule and costs. Let me repeat that. We're holding to our FID budget and cost. As you can see here, we've met all of our 2008 milestones.

This slide also identifies the key milestones we've set for ourselves for the first three quarters of this year. Suffice it to say, we want the project to be 85% to 90% complete by the end of 2009.

But 2009 is the year of major construction and 2010 will be the year of commissioning.

Let's take some picture -- or look at some of the pictures here. On slide 23, before we get to the Karratha slide, let's show you a little bit of the international construction sites that are all feeding into Karratha at this time.

On this slide, you'll see one of the preassembled units being built in Laem Chabang, Thailand. The first 57 modules and supporting structures out of a total of 261 have already arrived at our Pluto site. The last of these modules, of course, is expected to be arriving by about one year from today.

In Thailand, more than 10,000 people are working on our Pluto modules and support structures.

On slide 24, this is another one of our modules in Thailand. This is the gas turbine power generation unit, and you can get a sense of the scale of these units and also the amount of work going on at these yards from this picture.

Going to slide 25, this is a liquefaction unit. In the small picture on the right, you can see that this is almost the very same unit from our Train 5 North West Shelf which we had on the front of our annual report last year. Our Pluto module is just like Train 5, which is on the -- Pluto is on the left here. The module will be one of the largest and weighs in at about 1,800 tons, and it stands about 35 meters high.

Over on slide 26, let's move over to China and the jacket being assembled at Shenzen Chiwan Sembawang yard. And I think I got that pretty close to being right. You can be forgiven for thinking this looks an awful lot like the one we showed you launched at Angel site just 18 months, and it does because it is very similar. The Pluto platform will be placed in 85 meters of water.

Over on slide 27, now we're going to move over to Malaysia. Here, we see the topsides being built in Ramunia -- I missed it -- Ramunia in Malaysia. Again, similar to the images you saw of Angel, which are down at the bottom left-hand corner.

How you should look at this picture is -- on the Pluto topsides, the platform on the left, the facilities, the topside deck, is on the left. The deck on the right actually sits on top of the deck on the left, so it's a two-phased [tip] there after they get construction. You try to do most of your construction as low to the ground as possible in the construction yard.

Onto slide 28. There she is. It floats. This is our Woodside LNG tanker that is under construction and is on schedule in Korea's Samsung yard. The first steel was cut in June of 2008, the keel was laid in November of 2008, and the hull was launched just last month.

Now, if you have never seen the inside of a new membrane LNG ship tank, where we put our LNG, just take a quick look at the PDF we sent out this morning of our annual report. We put it on the cover of our report. So we're really proud. This is our first ship wholly owned by Woodside. And we've airbrushed out the name of it there, and it's going to be a very special occasion when we name our ship.

Moving over to slide 29, we're moving into Karratha here, into western Australia. You can see the green works and the Train 1 construction site. All the concrete foundations are being installed at this time to start receiving our really big modules. The first 1,000-ton-plus modules will be shipped in early July and will be placed directly under final pads and piers as soon as they arrive.

On page 30, a different angle. I feel like almost a travel agent here, showing you places to go. But here in the foreground, you can see actually the placements of our first small modules that lead up to the [pry graf]. The bottom right is the onshore approach to the jetty and loading piers, so the jetty will come to the right, and that will be where our LNG and condensate get floated out.

Middle left on the picture are the beginning of the two large and one small condensate tanks. The combined capacity of these will be about 130,000 cubic meters of condensate.

Now a bit up to the right of these condensate tanks that are under construction are two LNG tanks that have roofs in place. And you can just barely see it here, but you can see the concrete walls now coming up from the base around the metal structure that is already built.

The upper-left construction I'll show you a little bit here in a few later slides.

Let's take a close-up now on page 31 of the condensate slide. Here you can see it under construction. You get a good feel for the size of these. If you take a look at that right tank, right on the left side of it, you can see a person up on the wall of the tank with his white hard hat and his orange workshirt.

Now, just because I see it here, that is a loaded LNG tanker departing North West Shelf in the background.

So, all in all, Pluto greenfield and Train 1 are going on schedule and budget [time]. It's all good right now and we hope to keep it all good.

Now, let's talk about our future projects. On slide 32, I show you that, as you know, when we get our LNG production up from Pluto Train 1, we will see our current equity LNG capacity increase by almost 250% -- or 250%. Even more impressive, I think, is that when Pluto comes on production, we will have increased Woodside's equity LNG capacity by fivefold in a little more than six years.

So where we go from here? We've been working hard on Pluto Trains 2 and 3, Browse, and Sunrise, and I want to show you about those projects in the next several slides. So we'll take each one of them separately.

On page 33, slide 33, you can see the designated sites for Pluto Trains 2 and 3. The path for Train 2 is complete and ready to go, although we have some prepared fills stored on this site to be used for Train 1 later this year. And at the top left, you can see the Train 3 site taking shape. So again, Train 2 pad is virtually ready for foundation, pads and piers.

Moving over to slide 34, here you can see a close-up showing the Train 2 site with the various grades of site fill stored on-site. Very little has to happen to get Train 2 pads to look like Train 1. And the infrastructure we're putting in place, like the storage tanks you saw earlier, have the capacity to support the second Train.

Also, we have the environmental approval already for up to 12.5 million tons of LNG production. And, I'll just say, we completed the base design and received three excellent proposals from contractors -- from EPC contractors for the Phase II [feed].

So where is the gas going to come from for Trains 2 and 3? Moving over to slide 35, as Reinhardt Matisons told you all in November, the market demand is still there and, not surprisingly, we had very strong customer interest for Train 2. So the real challenge becomes the acceleration of Train 2.

Now, I'm going to show you three options. The first option, of course, is expiration discovery. What I can tell you is the first well of our six to eight well drilling program this year, exploration drilling program this year, is currently drilling. It's a prospect called Martell. We're hopeful, but it is exploration.

If we hit gas, it will be a very good thing for Woodside and the multiple prospects that we have in this region. While we like this option in terms of equity, given appraisal and development options, it might be expected to take several years to mature the production from this field.

So hold onto that option for a minute and let's talk about option two -- using outside resource gas. Now this is something we've talked about many times before. With about 70 TCFs of gas out there in the Carnarvon basin, this option could take three to four years to develop into production, once we get the agreements put in place. So that's option two.

Let's try the option three. This is the one I like the best. It excites me a lot because it really is the best one for Woodside. It combines the provision of capacity to third party with our own exploration success via the acceleration of Pluto and Xena reserves.

In other words, borrowing Train 1, Xena, and Pluto reserves, which, of course, adds value to those reserves because of acceleration. Now, the timing for this option is ahead of the other two and it lowers the amount of third-party gas that's required.

Now, remember what I said earlier about the strengthening reserve position after we've drilled our Pluto wells, and the ability to supply early gas.

Now, over to Browse on slide 36. I think it's appropriate to spend quite a bit of time on the Browse today, as Browse represents well over half of our contingent gas and condensate resources, and its initial LNG processing capacity will be in the range of 10 million to 15 million tons per annum.

Browse is very important to Woodside, and indeed, Browse is very important to Australia. Just ask a politician.

I'm happy to say that significant progress was made on this development during 2008. One of the key areas of progress was the big increase in our understanding of the field. Three appraisal wells were drilled. We've now drilled 11 appraisal wells in these fields since 2005.

When we started in 2005, we only had three exploration and two appraisal wells, which were very old vintage in these three reservoirs.

Significant analysis is now being conducted on the results of those wells, and of [seismic] we shot in previous years. Additionally, we have applied the same probabilistic reserve techniques that we apply in the North West Shelf.

As the slide shows, a result of this work has been an update of our estimate of the resources. For Browse as a whole, the gas resource estimated declined from 18 TCF to 15.5 TCF in reservoir and when excluding [fluror] and fuel, to 14 TCF of sales gas.

Now the condensate estimate has actually increased from the approximately 350 million barrels to just under 400 million barrels.

In 2008, we've narrowed the development of locations to two options. On this slide, we've indicated one of those options is a pipeline to [gas] to our North West Shelf Pluto complex.

So let me just reiterate. Very few wells, very loose control of the reserves or the contingent resources in 2005, now we know we have a world-class facility at 14 TCF of available and 400 million barrels, or just under 400 million barrels, of condensate, a world-class asset that we're really, really ready to get going and get this thing into the development phase.

Moving over to the other option is the Kimberley option. And significant movement here. That brings the gas to the onshore region of the Kimberley region. With respect to this option, I'm happy to be able to say that significant progress has been made. In this case, the progress hasn't just been Woodside, but it's mainly been the WA, the Western Australia, state government.

As you may be aware, the state government has been seeking to establish an LNG precinct in the Kimberley area for gas discovered in the Browse basin. Now significant progress has been made with respect to the precinct with the state government announcing its preferred site of the James Price Point area, which is clearly okay for us for development.

The government has continued to progress the precinct with consultation with stakeholders. As mentioned, the site chosen would be suitable for us as a site for Browse gas, so we will continue to watch the state's progress and are very, very willing to participate as and when requested by the state.

We anticipate choosing between the Karratha and Kimberley options in the first half of this year.

Let's go over and take a look at Sunrise on 38. Our Sunrise development is also moving ahead and has the potential to add significant equity LNG for Woodside. We've narrowed the options to two, via the best commercial option analysis, and that is a brownfield development at Darwin or a floating LNG concept.

Both have their advantages and both have their challenges, so we're working with the joint ventures and the governments to ensure we make the right decision. On the government front, the Australian and Timor-Leste government jointly formed a Sunrise commission late last year, which we see as a very positive step.

In 2009, we will select the best option and submit a field development plan to the Sunrise commission for their approval. That will be a major milestone towards the final investment decision.

Now let's take a look in our total Woodside LNG future portfolio. On page 39, you see -- we've talked about LNG as an investment for Woodside. I think the folks at Poten & Partners in New York have heard us. If you want to have an LNG position in your investment portfolio, we say -- look no further than Woodside.

This chart shows you why. Our ratio of Poten's estimate of LNG equity over the next nine years, we have now divided by market capitalization of the Company as of 31 December 2008. As you can see from this chart, even with the global downturn, we emerge stronger than ever.

I think a lot of folks thought our statement that we're the most leveraged public company to LNG was a future projection and not current, but it's not. You can see now and even more so in the future.

On page 40, we're maintaining the growth momentum. Not only additional wells for oil in our existing Neptune, Enfield, Stybarrow, Vincent, and Laminaria correlated fields, but our LNG projects are all progressing -- North West Shelf, Pluto, Browse, and Sunrise.

Let me repeat that. Even though we're cutting back on some activities and projects, we will be drilling oil wells that give us quick payout on our Corallina fields, our Vincent, and our Stybarrow and Enfield this year, as we promised you. And also at Neptune.

Just to make sure, one more thing, let me just tell you there is no change to our FID guidance that we gave you at our November investor briefing for our project.

Over on page 41, finally, exploration. We continue to invest in exploration. Our main focus areas will be Australia, of course, but this multiwell program predominantly in the Carnarvon basin. We've completed our final Libya onshore commitment well and we will be considering our options with respect to the discoveries we've made there. And I'll say the last, F1-210, was really a good one.

And we will be participating now down the coast with a well in Sierra Leone, in which our share costs will be almost entirely funded by Anadarko. In the U.S., we have at least one well planned this year in the deepwater Gulf of Mexico, with a larger follow-on program for 2010.

In Brazil, we plan to follow up our recent oil and gas discovery at [Emorit] with another exploration well in Ventura, to the southwest. And then there will be a third well following that.

So where we can see good quality, low-exposure options, we're continuing to invest in our future growth.

Finally, the last page here, just to wrap it up, let me say that Woodside is weathering the storm. In times like these, small companies really struggle. But strong companies like Woodside get stronger. We have world-class assets, we have an experienced management team, we've got a great Woodside workforce, let me repeat, we've got a great Woodside workforce, we have dedicated contractors, and we have access to financial markets.

As I said, in times like these, companies like Woodside get stronger. Now we turn it over for your questions.

Mark Greenwood, JPMorgan.

Good day. I had a question for Mark. I was just wondering whether you could spend a little more time on the deferral of expenditures that you had mentioned, AUD500 million during 2008. I'm just wondering, where exactly are you cutting back? How much is CapEx versus OpEx? If you could just flesh that out a little more, please.

As you would have noticed in our investor briefing in November, the majority of the spend in 2009 is capital, so you could expect the majority of cuts will come from capital.

As you probably heard in my presentation, it is a combination of some expenditure is eliminated, some expenditure is deferred. On the deferrals, as Don took note of, this has not changed production, this has not changed the progress or plan as far as our projects ago. So it is really noncritical activity that is getting moved from one year to the other.

The other thing that gets into those numbers is we are seeing a decline in cost environment and we are taking advantage of declining cost environment.

So what's your revised budget? I think the last time you published that was at the investor seminar, and the CapEx budget was about AUD7.3 billion for '09.

As we said, we are in the middle of going through a further round of this. We will be giving update guidance later in the year.

Okay. Just while I'm on CapEx, I noticed there was a difference. In the slide, you talk about AUD5.5 billion of CapEx expansion in 2008 but on your cash flow statement, it was AUD4.8 billion. Could you explain the difference?

I'm flipping through the slides. You're talking about the slide on the appendix, is that correct?

Slide 46, it shows a capital expenditure of AUD5.5 billion in 2008. And it was AUD4.8 billion in the cash flow statement. Is that responsible for the increase in payables?

No, what you're probably -- need to add to that. If you actually look -- I know it's small on the chart, the footnote, the slide actually includes capitalized interest. So you wouldn't see that on a cash-flow statement.

Is that responsible for the full difference, the capitalized interest?

It's going to be responsible for a big chunk of it. I can't get you an off-the-bat answer on that.

Okay. I just had another question while I've got you on D&A. The D&A was a little higher than we were going for. I'm wondering what contributed to that uplift in D&A in the second half, [because] as Train 5, Angel, a couple other new projects kicking in?

It is a combination of the new assets that are kicking in.

Would it be possible to give some guidance on D&A for 2009?

I think, when you look at 2009, we won't have new projects started. You will see some incremental contribution projects that were started late in 2008. To that extent, you'll see incremental DD&A go into the numbers.

And if I could, just a question for Don. In the last few weeks, I think, Martin Ferguson has been in the media calling for more cooperation between oil and gas sector players, particularly to share infrastructure in the LNG sector. Just wondering, with respect to Pluto 2, are there any ongoing active discussions with third parties?

We're the most cooperative company in Australia, and number two is yes.

With one -- is it with multiple parties where you see options, or are you discussing anything specific with one player?

Yes, it's multiple parties.

Thank you.

John Hirjee, Deutsche Bank.

Good afternoon, gentlemen. A question to Mark, first. Mark, in terms of what you said about your financing requirements, quite emphatically you said debt markets, but I guess the caveat is that oil prices and exchange rates remain where they are. So what happens if oil prices deteriorate? What options will you then consider?

A couple things on oil prices. First off, when you look at the current oil prices, Brent -- this is just a point there, everybody keep in mind. Brent, where we price our actual sales off of, is a bit higher than WTI. That's the first point to keep in mind.

The second point is, obviously we don't know what the oil price is going to be, nor do we know what the FX rate is going to be. In terms of sensitivity, obviously if the oil price goes down, if FX goes up, we will need more money or we will use more money, but having said that, we have a lot more leverage to pull than the ones we've chosen to pull.

So, in other words, you kind of expect a -- think about it chronologically. In November, we sat down in the investor briefing, we gave a plan, we watched the external environment through December. Starting at the end of December, we decided we needed to take steps proactively to get in front of the decline in the external environment. Management got together, decided to start moving expenditures, I've detailed that. More of that is on the way. And even more of that can be on the way as required.

Okay. So I take it, then, you are effectively discounting any equity raising in the market.

I don't think you can discount the price of oil and gas. We don't know what it is. What I can tell you is that management has the plan, and the plan is reduction to expenditures, reviewing our noncore assets. As a result of that, we expect a AUD1 billion to AUD1.7 billion funding requirement, and we intend to hit the debt markets, and we expect that the debt markets will give us AUD1 billion to AUD1.7 billion.

That's very clear. In terms of another question, if I could ask Don, you've always said, Don, in the U.S. you had to get bigger or getting out. Where are you at with the U.S.?

On OceanWay, we've suspended that project, but I'm sure you're talking about the Gulf of Mexico.

Yes.

The WUSA is maturing there. We had a really good prospect inventory down there now. We're developing our leads into prospects. We have a high [seismic spin] this year. Actually, the rig that we have coming in is late to come in, so I actually got kind of the benefit to move some of those wells into 2010.

At the same time, we do plan to drill deepwater wells over the next several years. We will take them slow and easy, learn from them as we go, and we will take a moderate equity interest in these so that we don't put too many eggs in one basket down there.

The point is we like our Power Play, we like our Neptune. We're down to just a few shelf properties now. We will not be exploring in the shelf at all in the future. We have nobody spending any time in exploring that at this point. The lease sales, we have done well on those in the last couple of rounds. We think we have a nice portfolio going forward, and the key thing is we've got some great partners who are sharing their portfolios and we're doing a little bit of mixing and matching with some of the prospects that we have.

So we're going slow, but we do expect to grow, but we're not going to overexpend and overexpose without having the proper learning that goes with it. And Agu, is that a fair enough answer?

Yes. You've got it right.

Thanks. One more question if I could, and probably ask the slide 47 in your appendix. Can I just make sure that I am reading the numbers correctly? Those are in 2009, averages you expect to achieve in those fields. Is that right? Is that end of the period or the average for the year?

Those are 2008 average production.

So that in 2009 is incorrect, is that right?

Great catch. Let me just say that to everybody. On slide 47, that should be end of 2008. Nice catch.

Thank you.

Let me mention one other thing, while I've got kind of a flow-on from Mark's first question. I just want to reiterate one thing. We are continuing to develop, obviously, Pluto 1. We are continuing to work on all of our core assets in Australia, Timor, and western Australia. In other words, all of our core LNG assets are continuing to go on. No cutbacks. We're continuing to drill the tie-in wells to our oil facilities here and in Neptune in the Gulf of Mexico.

We are looking at activities that are outside of those and deferring and cutting activities. The issue is is we've got some noncore assets we're taking a hard look at. The first action you saw was OceanWay. We are deferring some other things and some other activities, but we still are in with our major program of production and development. I just want to reiterate that. Thank you.

Gordon Ramsay, UBS.

Thank you very much gentleman, for the presentation. Some very good peer group comparisons. Just looking at Pluto, Pluto Train 2, you really haven't given us any indication of what kind of timeline you're working with to potentially commit to that. And obviously, securing the gas is the key.

I'm just wondering if there are other factors driving it, in terms of the workforce and potentially exploration results. If you could give any guidance on what would be the ultimate timepath to move forward with that.

Clearly, if we have -- the issues that we're working on come to a successful conclusion, and that's either exploration or some negotiation, at this time, like we said, we have three really good proposals for fee from our contractors. We've got the pad ready to go, so it would be a matter of getting the long leadtime items put in, but we would be, at this time, still looking at a successful RFSU for Train 2 in the first half of 2013. That's the first half of 2013.

That requires -- let me repeat. That requires some success in both, probably, exploration and in negotiation. And we have the proper people working on those items.

I'll just say this, one other thing is the government certainly looks at those pads up there, and the ability to move gas through there. They certainly are interested in seeing Pluto 2 and 3, not only for the fact of evacuating gas, but, boy, we create a lot of jobs up there. And they know it.

Lastly from me, just on the CapEx again, so the previous guidance of 6.9, after we strip out exploration for capital expenditure for 2009, we can immediately take 500 million off that. But coming back to you, Mark, you're talking about potential target of another 700 million. Is that correct?

Can you repeat the question? You seemed to ask a question and answered it yourself.

The question was -- just trying to work out what kind of expenditure you'll make in '09. You've indicated that you've got cuts in place of potentially of around 500 million?

Yes, but that's not -- that's not fully out of capital. So it is across the Company in all categories, the spends are being looked at. What I was, I think I was telling Mark earlier, obviously as most of the spend in aggregate in 2009 is capital, you can make an assumption most of the reductions being capital.

And the target going forward, you mentioned additional reductions you were targeting.

Yes. Just -- it's the American accent once again. It's several hundred million more, not 700 million more.

Sounds close. Thank you very much.

Stuart Baker, Morgan Stanley.

Good afternoon. Just coming back to the Browse Basin a little bit, and see what you're saying there, I was just looking at it, the reserves today appear to be smaller than what they were a year or two or three ago. And I was kind of curious to find out where you are with the marketing, or where that -- about 14 months ago you agreed to -- came to an agreement with Taiwan. It just seems to me that this [thing to expect] is slipping off the radar, and it looks less certain today than ever. And it certainly doesn't appear that the marketing side of this is paralleling the other progress in terms of site selection.

I beg to differ with you. The reason is is that, in 2005, when we started the appraisal, we had very little reservoir control. And we made a P50 estimate of 20 TCF. When you take outfield [and put it as] 18 TCF is what the numbers were and 300 million barrels of condensate.

That was based on some 1970-era wells. And we basically had one well in each of the -- three plus, maybe two in a couple. But the point is, our P10, P90 range in 2005 was tremendous. I think it was like three TCF on a P90 basis, and the P10, I can't even remember, it was like 30 TCF. So we were really, really a wide range.

So we really knew very little about control of the field, and what the edges might look like.

Now we've drilled another 11 wells along the way, 14, I guess it is, and we have completely narrowed the range of P90. We had a lot of confidence in our P90 now that will support a two-train operation in Kimberley, and our P50 has come down a bit, but it is a much more solid P50 at this point.

You look around the world, and you look at the waters that we're in out there and you take a look at the government environment here and the contractual environment, companies like ours give their right arm for a 14 to 15 TCF field with the appraisal almost finished, like we have it at this point.

The reservoirs, two of them look really good. One of them is a little bit more -- needs a little bit more work to get it done, but I would say we have a 90% confidence factor of what the final appraisal looks like.

The reason we moved the numbers this year is we didn't have enough confidence in what we made an agreement was we weren't going to move the numbers during the appraisal until we got to a confidence level. So now we have that.

I'll also just mention that the CO2 level appears to be 10%. That was much better than our worst fears. So that, along with what the state government is doing with the Kimberley site, I think we've moved quite a ways along. We've got certainty on our contingent resources. Our P10, P90 is really narrow. We've got confidence on our P90 gas that we can actually support the two trains, and then you ask about marketing.

We've got two of the best KTA contracts that are in the industry. Let me just remind you, not only do have a CPC contract in Taiwan, but we also have the PetroChina in -- in China.

I think it's going along quite well and I think the team downstairs is pretty motivated to push this over. We've got our principals agreement from the joint venture partners to finish up the appraisal and to do the environmental marine studies, and we're just chomping at the bit to be able to get moving on the James Price Point opportunity.

So sorry about the long-winded result, but I think you're basically headed the wrong direction from where I am at.

I appreciate that. Thanks for the expansion on it. Moving over to Pluto, a lot of work to get done this year in looking at the site, pretty flat, and the 57 modules have got to be stitched together there now, and it just looks like a lot of work's got to get done in a short space of time. I guess the question is how confident are you of getting it done by year-end '10, and what can go wrong, if anything?

Well, in this business, you do have risk. We like a lot of parts about this. Number one is we're fully functional on all of our facility sites. We're almost finished with engineering. At Karratha, we've geared up -- we don't have the bed restriction anymore. We've got over 1,500 beds at our construction site, moving to 2,100.

We've got 120 other new builds up there, so we've got all the accommodations, all the capability. All of the -- virtually all of the modules have what -- we have every module up in Thailand, what we call green light, amber light, red light. And we modulize, basically, every one of these and we watch, we shift the workforce to where we need.

Basically, everything right now is running green light for the next couple of months on shipments. The shipments are all looking good. We have a lot of cushion in the areas for some of the leadtimes, if valves don't show up, etc., so we have a lot of flex in the capability.

We are staying ahead on the pads and piers on Train 1 site to be able to accept the modules and be able to place them as soon as they come in. At least for the big ones, we will have that.

As I would say, we just get done with a Board meeting here, and Lucio Della Martina and Phil Mire came in and gave a 60-minute presentation -- not presentation, but a discussion of the status. I'll tell you, we feel pretty darn comfortable where we're at right now.

Things can go wrong. One of the biggest risks is the productivity of the onshore labor in Karratha. And that's an area that we changed our contracting strategy.

We're also seeing some first evidence of reduced pricing in contracts around the world. We hope we see more of that here. But I think, by April, we will have all the contract let for the project, we have everything lined up, and so far everything offshore and onshore -- offshore, the pipelines, and onshore, going our way.

We do a deterministic schedule and we do a probabilistic schedule, and we're both feeling pretty comfortable either way on those.

Our P90 schedule and our P10 schedule, nothing there is concerning to us as to our commitments for our contracts. Let me just say, our contracts, our Pluto contracts, we've got great partners there and they're pretty darn excited about what they're seeing up there. We've had some of their management down from Tokyo. I'll say they're looking forward to deliveries of our LNG and I'll also say they are right with us on it.

We've got good solid Pluto contracts for the gas marketing side. I like those Pluto contracts as much as any other contract we have in the Company at this point.

Thank you.

Brendan Warn, Macquarie Research.

A double questions for Mark, if I may. First of all, can you just confirm that the AUD1 billion to AUD1.7 billion funding that you need for the rest of this year is on top of the AUD500 million CapEx reductions? There's an underlying increase of 1.5 to 2.2.

Also, can you tell me what that number might look like if the oil price stayed at 40 dollars a barrel for the rest of the year. I see you're pricing it off the futures curve, which implies a rise to [turning back to two five] by the end of the year.

Your first question, the AUD1 billion to AUD1.7 billion takes into account all of the things I detailed, which includes kind of the expenditure reductions that have already been budgeted at this point. And then, the other items. So yes, the short answer to your question is, yes, AUD1.1 billion. If you tell me point number two again?

I see that you're coming up with that estimate based on the futures curve, which obviously rises to 55 dollars a barrel by the end of the year. I just wonder how much that number might grow if the oil price stayed flat for the rest of the year.

Number one, obviously, the futures curve is in contango, but the average is not 55 dollars for the rest of the year.

The second point is, as a reminder, if you're quoting WTI, we do not price off WTI. We price off Brent, and Brent is actually higher than WTI (multiple speakers) there it is -- the FX -- exchange rate plays into it, as well, so you can't actually kind of give a -- what happens to 40 dollars without giving the corresponding change in FX.

What we have seen, obviously historically, is oil and FX have been moving up and down together, and that is a benefit in terms of the exposure, because we're buying a lot of Australian dollars this year because of onshore Pluto construction activity, primarily onshore Pluto construction activity. The falling Australian dollar is offsetting, to some degree, the fall in oil prices.

Sure. And second, I see that you overspent on Pluto by about AUD300 million versus the estimates you gave us back in November. And I appreciate Don said there were no cost overruns at the project. Can we just confirm, therefore, that that AUD300 million cuts the expected CapEx on the project in 2009, or is it -- are we still with the old numbers you gave us back in November for this year?

The guidance we've given at FID is the total life of the project expenditure. Obviously, phasing is at our discretion, and so, we may kind of run things fast -- we made run things slow, depending on how things are going on the ground, but there is no change in the FID guidance, which relates to the total cost of the project.

Let me clarify a little bit of maybe the confusion there is we talk about a AUD12 billion spend. We did an AUD800 million long leadtime item prior to the AUD11.2 billion FID for the cost forward so you put the two together and you get the AUD12 billion.

Finally, you allude to, in some of those slides, that you may be looking at potentially selling some noncore assets. Can you give us any indication as to what you may be looking at with something like the Otway development in Victoria or the [Overnet] stuff in Algeria potentially to be on the book?

We've already --

I was just going to add, we believe mission on the slide that when we say noncore, we're defining noncore as everything outside of west Australia and the Timor Sea.

Some of this is you've got to kind of test the market and see what other people might value things at. We're not in a fire sale here for sure. We have listed our intention for Africa, though, and I would just say that OceanWay, we've listed our intention. But everything else is basically we're working with our employees to take a look at what might be more valuable to other people than us, and also something that gives us good return on our investment.

Thank you very much.

Simon Otten, [Ausbach].

Good afternoon. Can you give us an indication on the CO2 content? It's fallen from 12.5 to 14 to 10, you said? And does the reduction of approximately two TCF over the past 18 months include the 15% WA government reservation policy, please?

First off, the second question first is, no, the 15% is not involved in those numbers. Those are straight reservoir numbers. So the 15% would have to be included in both of those. And I'll say we certainly look at domestic gas being priced for these new facilities fairly well equivalent to our LNG pricing on a netback basis. That's what we will demand.

The other issue, I guess you would say, is the CO2 content. Yes, we've had 12 to 14 out there on some of our reservoirs. I understand from our reservoir folks working on Browse that, actually, that number may be on the conservative side when they had it out there. But where we have found is now on the three reservoirs an average of 10% now. Those are taken into effect as to what the actual gas for sale is in those numbers that we have.

Mark [Harm], Merrill Lynch.

Good afternoon, gentleman. Two questions, first of all, just going back to Mr. Greenwood's question regarding the CapEx spend highlighted on slide 46 versus [worst indication]. Just to be clear, it looks as if what you've done is [leased] a payable of around AUD0.5 billion, which I assume you've included in your chart to get to AUD5.5 billion, and that explains most of the difference between the cash-flow statement of AUD4.8 billion and the chart from page 46, showing that you've spent AUD5.5 billion. Is that the key?

You're right about that. It's the difference between accrual basis and cash-flow basis.

Yes, I did, thank you. The second question, if I may, I understand that when Mr. Voelte took his position at Woodside, there was a five-year tenure on the initial agreement, which would suggest that the renewal of the contract would be up in April. For Mr. Voelte. So I'm just interested to see what movements, if any, are being made there, [either due] to committing to stay on and committed to Woodside.

I think it's in the annual report. Look, I know it was a five-year deal but some of that was based on tax laws at the time that have now been changed. I think we've been pretty clear about that. The Board, about 18 months to two years ago, changed my contract. They asked me to change it to an evergreen day-to-day, and it's a great contract.

I've got a great relationship with the Board. I've got a great relationship with my management team and the employees -- hopefully, with the employees. I like what I'm doing here. I've got some goals. I really want myself to be replaced by one of my managers here. The Board's asked me to stay on a while longer to achieve some goals, and I'm having fun, and frankly, I'm not even thinking about the end date.

But there will be a time when it's time to get some -- some fresh blood into the game, and we've got some really wonderful people here that can run this Company to a much better place than what I've been able to take it. So enough said. We don't even talk about it around here anymore. We're just moving on.

I know one of the guys told me that five years ago yesterday, they announced I was coming over here and I'd have to say, career-wise, best decision I ever made. I just really loved it. I love Australia and I love what we're doing here. So, hopefully, with this long answer, we kill off this answer forever until I ride off into the sunset.

Diane Brookman, Citigroup.

Regarding the commissioning of Pluto, you indicated that that would occur towards the end of 2010. Can you give guidance on when the first volumes of LNG will be sold?

Our schedule, as I said earlier, our FID advice remains in place. We hope to have -- let me kind of give you a little timeline here. We hope to have 85% to 90% of the construction finished by the end of 2009. We will already be in commissioning. We have our complete commissioning team already formulated. Most of it's populated. We know who our first plant manager is going to be -- run it, who happens to be involved in the whole operation. We know what the synergies are, with North West Shelf and the capability.

We have over -- at last count, 52 operators already assigned to Pluto, so the commissioning will happen over the period of 2010. For instance, on Train 5, we had gas into the Train 5 facility as early as May of last year, although we didn't really go into the commissioning activities, what you call start-up/cooldown activities until about five months after that.

These are kind of long drawn-out processes where you start introducing gas and taking care of things. So that's all well in Train. We've got a really, really experienced group of people to do this, and the commissioning part will hopefully go off just like clockwork. Again, we've always said we want to put gas in by late 2010 and first car goes out first thing 2011. That's our current plan.

Thank you. In regards to LNG ramp-up, has there been any change to the plans over last six months?

No, I hope we don't have any problems with the cryogenic heat exchangers, because we've made the changes to the cryogenic heat exchangers, and they are being shipped down to Thailand, as we speak. So we think we've got that fixed.

We like our turbines and everything, so what we expect is is that Pluto will ramp up and the same advice that we've given before. Let me just say there, these things, when they go on and they come up, they tend to come up very fast and clean if you don't have problems.

What you do is you usually take them down and after 30 or 60 days to fix a few of the small problems. Other people have had major problems in start-ups. We haven't had those, fortunately. So we are expecting a good, clean, smooth ramp-up, and we'll go with guidance at this time, not knowing anything more than we have to date.

Thanks. Have there been any indications from the buyers to alter that ramp-up phase?

No.

Thank you.

Johann [Herststren], Southern [Crest].

I was just interested in the comments you're looking at the noncore assets for potential sale. With 90% of Pluto and 50% of the Browse basin, is that an opportunity you're not considering as equity selldown on?

We're absolutely not considering any selldown of our core LNG assets or our oil facilities here. That's not even contemplated or discussed with the Board at this time.

And that's -- to some extent, do you think -- they are your premier ranked assets and in this market, it might be easier to sell them, perhaps, than some of the other assets.

Let me just say that we have some assets that are well placed in strategic areas where we're not a big player. And, potentially, other people desire those maybe more than what we do. In our backyard, nobody does LNG in Australia like Woodside does. They're going to have to, probably, haul me out of here horizontally before I give up any equity in any of our projects.

That's good. Just another question, on the two options for the Browse basin. And taking it down to Karratha or to the Pluto project. Would it be easier to feed it into Pluto rather than the North West Shelf?

That's an option that we have, and it's an option the North West Shelf partners understand and it's all part of the potential option there is, and we've got to be very clear that gas could come down North West Shelf, and/or Pluto.

You have your own gas, sort of, rather than having to rely on exploration on the North West Shelf, although it's obviously cheaper to bring it in from the North West Shelf from Martell, if that's successful, or one of the other wells.

I would just say that we keep all options open.

Okay, thanks for that.

Scott [Ashton], [BBUI] Limited.

It's previously been asked by Johann with respect to your selldown on Pluto.

That's the last property we will sell down, from what I can see.

Stuart Baker, Morgan Stanley.

Just a small one. Mark, just looking at the segmented reporting on page 76, just wondered what happened to the Middle Eastern North Africa business units. So are they still out [power and head] there somewhere. Just wondering where to charge up in the figures across those business units.

This year, we decided Mauritania was the big -- from a reporting standpoint -- the big part of -- the Middle East and Africa. With the exit of Mauritania, we made for the presentation that we would put the remaining assets into group and unallocated.

Thanks very much.

Angela McDonald, Bloomberg.

Just on Sunrise, it just looks as if you'd put back the dates a couple times so the concept selection there. Now it's in the second half of the year. Can you talk us through sort of where you're going with that, and I guess give us your latest thoughts on the floating options?

Let me tell you what's happening there. Both options are still in play. We're having both of them developed at this time. We're looking at the costs. We have finished our appraisals up there, and the situation is is that, in this world right now of steel prices coming down, Sunrise has a lot of steel in both options, either pipeline or shipped. And we are kind of taking a few extra months, you are correct, we're slipping a few but it's pretty early in the second half we will make this decision, but I'll just say that we are kind of delaying to get better pricing on the steel, and there is a little bit more to it, but it's all part of the cost analysis of the project.

Just one other one on your views on [colton] gas to LNG. Obviously, there's been a lot of money that's pouring into the other side of Australia into that state with some big companies involved. Have you changed your views at all as to the potential effect of that business?

We're not playing it so we really don't have a view on it. I would just say that we're really busy and we like our business, where we're at, and I'll leave it at that. I look over there and see the prices, too, and I am quite -- it takes me back.

Paul Garvey, Financial Review.

I just wondering if you're able to quantify at all what sort of job losses may have come about from the cutbacks that we're seeing to date.

I have been reading with great interest all the thin review analysis of our capital raising. Let me be very clear to you. Let me be very clear. We don't anticipate capital raised. I'm going to answer the question to you on that one. But also, on people, we have worked really hard to develop a really great workforce here. We're interested in deferring and cutting back activities, not people.

And yes, there will be some contractors and consultants that don't work here, maybe for the while. And there will be possibly some performers that decide to leave. But there is absolutely no across-the-board cutback that we are planning. We have been through this too many times and we've seen too many different examples in -- I could start in '77, go to '82, '87, '97, and people decimate their companies for years and they go after their people first. It's too easy to do that. The hard work is cutting back the activities and the unnecessary costs. That's what we're going after in our Company.

Core employees shouldn't really change dramatically or anything.

No, we need our core employees. That's the basis of the Company -- you can have great assets but if you don't have great people to run them, they aren't going to do anything out there.

With all the commentary you've given on your financing situations, I was just wondering how contingent that is on fixating and divesting any of your assets there, given it's not a great market to be trying to sell projects at the minute, is it?

I'll give it a range -- in the presentation, we did give a range of what our funding requirements may be, so when you look at kind of the variation, it accounts for a lot of things that still have to go under the bridge. As we said, there's other expenditure cuts are being considered at this point in time. There is the review of assets, which we mentioned, and you have to put that against the backdrop of, I think as one of the previous questioners did, you've got a shifting oil and FX rate. So you can't actually quantify what the future is because it's unknown.

Right. So in terms of -- how necessary is it to sell assets? I mean, will you be happy not to have to sell anything if the right price isn't there?

Once again, it's impossible to quantify an answer because you don't know what the future holds. We don't have any particular thing that's under consideration. We're doing a review of assets outside of western Australia and the Timor Sea.

Would you agree it's an inopportune time to be trying to sell assets, given where the oil price is and where markets are generally?

I don't think so. Look at some of the prices being paid up in coalbed methane.

[Di Band], ABC.

Did you say, Don or Mark, did you say you're chomping at the bit to get the James Price Point development happening? Does that mean you're leaning towards Kimberley LNG?

We're reviewing both options. What we're saying is is if James Price Point was an acceptable site for us, we had two or three that we liked. It's one of them. There is a lot of work to go on to get the stakeholders all aligned to make sure that everybody is -- can live with that. The state is working all that at this time, but we told the state, they have asked us can you develop LNG there, and we've said yes.

That doesn't -- that doesn't preempt the ultimate decision we have to make between the [Burrup], which is either North West Shelf/Pluto, or [that]. So if we said anything earlier in this conversation that you would pick up that we favored one over the other, we do not at this point.

So what's the hold-up with that decision? You said last year that you were going to make a decision before Christmas.

Yes. And clearly, the amount of work that the state has to do with the northern develop task force, we had a change in government. They changed the process a bit. Nothing wrong with that, it's just taking them a little bit longer to get down to their preferred site and some of the other issues around the aboriginal and the city of [Brin], and some of the local stakeholders out there to get them aligned before we go too far.

Also, do you anticipate the slowdown in Japan will impact on your future projects?

At this time, we have multiple different places that will take our gas. We have a lot of markets -- we have other things happening in the world, such as the supply from Indonesia is declining, other things. So there's an awful lot of levers you have to put into this.

At this point, Woodside is probably known as one of the most reliable, safest, and best suppliers of LNG into Japan, and they know what we can do and I would just say at the end of the day, we will have a very solid customer base there and I don't anticipate any issues there, and we have other customers around the northwest -- I'm sorry, the northern Pacific Rim that we can put our gas into.

We have not seen a reduction -- there's also a cleaner global energy future that these countries are absolutely being demanded by their citizens, and LNG is just -- it's the energy choice of the future and people are not looking at reducing that component of their energy mix.

So sorry, just for my record, was that Don?

Yes, that's me.

That will be the last question. Thank you. Please go ahead.

Thank you very much.