Woodside Energy Group Ltd (WDS) 2009 Q2 法說會逐字稿

Thank you. First, I want to convey my appreciation for all of you that are calling in to hear our results and, importantly, our future plans today. I think you will come away with a very good picture of our accomplishments and our exciting plans that create even more shareholder value in the near-term.

With me today is our CFO, Mark Chatterji, Mike Lynn and Richard Lawson from Investor Relations, and I have got Peter Moore here, our Chief Exploration (inaudible) answering questions.

Slide two is a normal disclaimer notice -- nothing changed there. Slide three, I would like to give you the headlines for the day.

First, production of 40.1 million barrels of oil equivalent is, I believe, our second highest half in Woodside history. Our profit is a fairly strong AUD898 million. Our employees did a really good job converting revenue to the bottom line in this weaker commodity price environment that we are experiencing compared to last year.

The North West Shelf is right where we want it to be, running at capacity, and some persistent design problems that we have had have now been eliminated. Pluto Foundation Train 1 is going extremely well, over 70% complete, and we have initiated FEED that is run in engineering and design on Pluto Trains 2 and 3. We are moving forward from an industry-leading position. We think that these will be Trains 7 and 8 for Woodside out of the first nine that get built in Australia. And some some other really good news -- confirmation that Pluto Trains 1, Trains 2, Trains 3 can all be located on the lower plateau, leaving the upper plateau for at least Train 4 and possibly a Train 5.

Browse is rapidly progressing. Clearly the best six months since we accelerated the development several years ago.

Seventh, Sunrise. We don't say much about Sunrise, but I will tell you several milestones have been achieved this first half of this year and I think many more to come in the second half. This half by far has been the best performance in almost all aspects -- production, operations, development, construction. I would say this current Woodside group of employees has developed into the best group I've ever been associated with in my 34 years. From the Chairman of the Board to the folks turning the valves, I think everyone in the Company is devoted to three things -- complete goal alignment, fantastic focus on our strategies, and excellent execution of our tactical plans.

Frankly, we're having the time of our lives. It doesn't get much better than this.

Now I'm going to turn it over to Mark, and he will give you our half-year results.

Thanks, Don, and good morning, everybody. I will go to slide number five. For the first half of 2009, Woodside produced 40.1 million barrels of oil equivalent, which was a 10% increase from the comparable first half of 2008. Now the major driver of this increase was North West Shelf, which had contributions from Angel and Train 5, while the Australian business unit put up strong performance despite a shutdown at Vincent.

We think production in the second half of 2009 is looking good. Vincent production was resumed in mid-June, and at the end of the half, we were making almost 29,000 barrels of oil per day on a 100% basis.

Train 5 is operating at its expected average capacity of 4.4 million tons per annum, which takes the entire system up to 16.3 million tons per annum, again on a 100% basis.

Finally, as I will talk about later, we have several new oil producers online. Now, as a result of all of this, we continue to expect full-year 2009 production to be in our previously announced 81 to 86 million barrels of oil equivalent range.

Turning to page six on costs, production costs for gas fell on both the total and per BOE basis as compared to the first half of 2008. This is due to lower OpEx on North West Shelf coupled with [sour] production on North West Shelf and Otway. Per BOE oil production costs were also lower compared to the first half of 2008, primarily driven by lower OpEx as the Northern Endeavor.

Moving onto slide number seven, revenue for the first half of 2009 decreased 21% versus the first half of 2008. With average Nymex WTI declining to AUD51.53 from AUD110.98. Now that falling commodity prices was partially offset by the follow in the Australian dollar to AUD0.71 from AUD0.92. It was also partially offset by the production increase I discussed earlier.

Slide number eight, as you might expect, lower revenues led to lower profits for the first half of 2009 versus the first half of 2008. However, profit for the first half was also impacted by foreign exchange gains caused primarily by the revaluation of our US dollar debt after taking into account the hedge of net investment provided by our US dollar asset.

Now those of you listening to the call who have been following Woodside for some time will remember that this same accounting impact showed up on our full-year 2008 results, only then it served to reduce profit as opposed to augment profit. The health warning remains the same. The revaluation is a book effect, not a cash effect. It could just as easily back itself out of the full-year results in the event the Australian dollar declined at the end of the year.

Slide nine, moving onto dividends. The directors declared an interim 2009 dividend of AUD0.55 fully framed. The dividend to 2008 reflected an unprecedented increase in the oil prize. Woodside is investing heavily in its growth as exemplified by Pluto-1, and we look to provide solid dividends that are consistent with this spending profile. The 2009 interim dividend will be fully underwritten using our dividend reinvestment program. Our intent is to maintain this fully underwritten DRP throughout the Pluto construction phase.

On the next slide, turning to expenditure, we announced in February that in light of the changes in the market place we were going to tighten our belts. Now the marketplace seems to have gotten better in the interim, but we have stuck to our plan all the same, reducing spending by about AUD0.5 billion. Most of these reductions were in capital, which, of course, is now the major portion of our expenditure profile.

Also, as you can see from the update, we expect to spend a bit under AUD5 billion this year on Pluto, which brings total expenditure on the Pluto-1 project to over AUD9.3 billion.

Slide 11, taking a look at funding, you will see that at the half we had $1.75 billion of dry powder in the form of our undrawn facilities, on top of which we had almost AUD800 million of cash on the balance sheet. Keep in mind that we had exposed the Asian syndicated loan shortly before we closed the half-year books. Our expectation is that these resources will take us through the end of 2009 and into the start of 2010, so we are now turning our attention to the rest of 2010.

While we expect our committed spending to be lower in 2010 than it was in 2009, as Don will talk about, we are now moving beyond Pluto-1 into the rest of the LNG growth portfolio. Our funding plan will depend not only on the activity in the rest of this LNG growth portfolio, but also on the scope of any asset sales we might undertake.

Slide 12, looking forward in addition to all the news that Don is going to give you about LNG, we would like you to keep in mind that we remain a substantial producer of oil and that oil remains an important part of Woodside.

You can see that we have a number of development wells being planned on our producing fields. Let me highlight two that have already come in, start with the Northern Endeavor.

Last year's subsea maintenance campaign has restored production from the existing wells, but, in addition to that, we sidetracked Corallina-2. The team thought that there might be unswept attic oil to go after, and we're pleased that this sidetrack has come in at around 26,000 barrels of oil per day on a 100% basis. We are even more pleased to see several similar structures to go after. At Enfield we drilled an injector and producer pair in the Sliver South block of the field, and that well came in at around 20,000 barrels of oil per day on 100% basis.

In addition to Enfield drilling opportunities shown on this slide, we have several near field prospects across our oil portfolio that are candidates for drilling in 2010.

And finally on slide number 13 on exploration, 2009 has seen Woodside participate in three discovery so far -- the Martell gas discovery to the North of Pluto and two oil discoveries in the Santos basin in Brazil.

We're currently drilling the Venus B well in Sierra Leone. Woodside has a 25% equity interest in this well. The Venus B, in addition to the Rickenbacker prospect in the Gulf of Mexico, both expose Woodside's material oil volumes in a success case. And we intend to finish this year by kicking off a new round of Carnarvon Basin exploration, which Don is going to talk about in the next part of the presentation.

Thanks for listening.

Thanks Mark. One quick comment before laying out our future plans. Mark is part of an extremely talented management group here at Woodside. They are really good. I'm a lucky person to have the pleasure of working with this great team. They can handle just anything that gets thrown at them these days.

Let me go to slide 15. Just a minute to celebrate our North West Shelf 25 years of operating pipeline gas in Western Australia, 20 years of delivering LNG to international customers. This means greater than 4000 petajoules of pipeline gas has been delivered, more than [2700] cargoes of LNG and 1000 cargoes plus of condensate. After 25 years, we're fully framed out at North West Shelf. Five LNG trains for a total of 16.3 million tons annual capacity, three fractionation trains, six stabilizers, two LNG berths, one condensate jetty LPG with jetty, two trunklines, three gas platforms and one FPSO.

For oil today this AUD27 billion project represents Australia's largest resource development and accounts for more than 40% of all Australian oil and gas, 65% of gas production in Western Australia and over 1% of the nation's gross domestic product.

On slide 16 we are just trying to give you an idea if it was more than just LNG that comes out of North West Shelf. It is a total commodity process, and we have shown you the last five years production of LNG, condensate, LPG and pipeline gas.

Moving over to slide number 17, this is where it gets interesting. I love the headline, Pluto Powers Ahead. For Woodside this is our project that builds on our North West Shelf experience. In fact, in less than five years from now, our plans are to have in place and operating four times the Woodside equity capacity at Pluto as compared to our equity at North West Shelf. More about this in a few minutes.

So I'm happy to report that our Pluto Greenfield foundation project is 72.5% complete as of today. Further, I'm very happy to announce that we are now in FEED for Pluto Brownfields Trains 2 and Train 3.

For Train 2 we see long lead time items mid next year, FID by the end of next year, and first gas before the end of 2013. For Train 3 we just add a year to these events, giving us a third train by the end of 2014.

In addition, we have confirmed a Train 4 location in our existing lease area and are setting up for a possible location for a Train 5.

Now let's take these items in order over the next couple of minutes. First, our Pluto Greenfield Train 1 project. I'm going to flip through the next 10 slides in pretty rapid progression here to save some time.

On slide 18 you can see our Greenfield site from the water side. Lower left is the jetty construction. Condensate tanks to the left and our two LNG tanks to the right.

Slide 19 you get the opposing view from the land. You can start at the top and see some of our utilities and flare systems facilities coming along. Train 1 is just in front of those facilities. You can probably make out the two big turbine packages. Train 2 is where you see some module stores, and Train 3 will be where the temporary construction cribs are now located in the near picture. And, by the way, you can see our North West Shelf plant in the upper right.

Slide 20, we thought we would show you one of our more than 150 already delivered modules being offloaded from its shipping vessel. Now this one just happens to be one of our turbine packages.

Slide 21 will take the same turbine package and show you it is on its trek, on its way to its final location which you can see in the bottom right-hand picture. This module technology we developed and that we're using on the second time on Train 1 versus North West Shelf Train 5 is really super.

Slide 22, this is the Pluto jacket up in China getting ready for ocean shipment to the Pluto field. The base of the platform is on the left of the structure as it lies on its side. You can see the four tan mats, which are the ocean bottom mud mats, and you can see the pile guides very clearly. The long cylinder pipes at each corner base. I'm happy to announce that the jacket was loaded over the weekend onto its oceangoing transport vessel, and it's going to be shipping in the next few days down here to Australia.

Slide 23, this is the Pluto production deck in our Malaysian fabrication yard. It, too, is nearing completion. You can easily make out the heliport on top. To get an idea of the size, you can see a man in blue and a white hardhat and standing on top of the yellow construction stairwell there in the front of the picture.

Slide 24, I'm happy to report that both LNG tanks have now topped out with concrete. As you know, these two tanks equal all the storage capacity at North West Shelf, and significantly we achieved a successful hydro test at tank #1 over the past week. Construction on the condensate tanks is at the right.

Slide 25, our Pluto trunkline is under construction. We're laying pipe both outbound from the onshore gas plant site, as well as laying pipe inbound from our Pluto platform location. About 45% is being completed. Each vessel is making about 1.5 kilometers progress everyday, and significantly the installation of all of the subsea flowlines is now complete.

Slide 26, this page shows you the milestones we have achieved so far this year and what we expect by year end. Major items to complete this year -- one, is to load out, transport and install the Pluto jacket; two, load out, transport and install the Pluto onshore topside; three, set down the main liquefaction modules; and four, kind of a general one, generically we need to continue to what we call break the back of the onshore construction.

As far as by the end of this year, we plan to be a least 85% complete with the Greenfield Train 1 project.

Now as far as commissioning is concerned, I am pleased to announce that yesterday afternoon we moved the first group of five systems over to our commissioning team who have been awaiting this move. So we now have commissioning officially. Now they have a busy year coming up because it was over 1000 systems to commission.

Slide 27, the project is maintaining cost and schedule. It should be noted that peak construction, a critical phase for remaining on cost, is anticipated to be completed over the next six months.

Now when we took FID in 2007 -- make that July 2007 -- we told the market we would be building the fastest Greenfield LNG development in the world. I know people were quite skeptical. After all, much bigger companies than Woodside have sat on bigger gas fields for years.

Now this was and still is an ambitious and challenging schedule. But, we remain on schedule for first gas from the Pluto field in late 2010, first LNG in early 2011, and by mid-2011 we expect to be running at full capacity.

Slide 28, let me just say one hurdle I want to to get over. Before we went on with the future Pluto Trains was the reassurance that I could give the board and our management team that our Pluto Greenfield Train 1 management team was grounded, solidly entrenched with that project, and well along an inevitable path, all that to ensure that Train 1 team would not be distracted by the expansion. I now have that assurance that we have achieved that.

Therefore, we are now in a Train 2 and Train 3 FEED. Since Train 1, Train 2 and Train 3 are sharing the same plateau, we are going forward with FEED for Trains 2 and 3 at the same time. Train 2 will be projected 60 to 90% Woodside equity train at a design of 4.3 million tons per annum. LOIs are scheduled mid-next year, FID at the end of next year, and first gas at the end of 2013.

Train 3 will be projected to be a 75 to 90 Woodside equity train at the same design capacity. Forecast LOIs mid-2011, FID at the end of 2011, first gas into 2014. Now, one other issue there is we will need a second trunkline with Train 3.

Now, you can understand what an advantage Woodside has to benefit from based on our early industry-leading Pluto-1 decision. If I might say so myself, it was a gutsy call. It's going to pay off big time I think for our shareholders.

Slide 29, let me summarize the gas sources for Train 2. Our Train 1 foundation Pluto drilling has come up very positive. Let me repeat, very positive. We not only have surplus gas to our Train 1 contract needs based on our core 15-year contracts, but we will also be able to accelerate a good portion of Pluto-Zena tail gas due to very high rate wells that we drilled at Pluto and will drill at Zena. Now this is increasing shareholder value to a maximum as we see it.

We also have use of a portion of equity gas for acquired equity from recent exploration discoveries. Also, in a few minutes, I will show you our expectations from our billing exploration prospect inventory. And finally, we may or may not include any other resource owners gas. We're very selective because the value proposition has to be a winner for both parties. Again, I will explain that more in a minute or two.

Now from the chart on the right, we have tried to graphically show you the acceleration potential of Pluto-Zena tail gas, as well as the stacking affect of the train.

Slide 30, another very important slide, we want to break down the sourcing of gas versus contract time parameters. In the upper half of the slide, we show you the cumulative volume of gas required for Train 2 and beyond. We show volumes of both a 15-year and a 20-year contract or contract adoption periods. Using the Pluto Train 2 volume requirement of 3.8 Tcf and 5.1 Tcf respectively, we show a most likely gas supplies scenario. We expect .4 Tcf of tail gas available from access volume as compared to our needs of Train 1 at the Pluto-Zena field. In other words, this volume is access to the 4.85 Tcf committed to Train 1.

Further, we expect the equity capacity designated to other resource owners to be approximately 1.5 Tcf. In addition, another .5 Tcf will come from existing discoveries or other gas secured commercially. Therefore, we need to identify 1.4 to 2.7 Tcf of gas that is probably accumulated from our 20 plus well exploration drilling program coming up. The expected range of volumes from our discoveries from this portfolio easily exceeds these requirements.

Importantly, the tail gas represents a conservative three-year acceleration based on P90 confidence or half of a train. Therefore, in our most likely scenario, the Pluto Train 2 could effectively produce first gas in 2013 and Woodside would not need to get the exploration discoveries developed to supply Train 2 until 2016.

So we have to find 1.4 to 2.7 Tcf of gas, not necessarily produce it, to get up and running with Train 2 in 2013. By the way, this tail gas acceleration phenomenon will be available in a domino effect for all future Pluto Trains.

Slide 31, kind of hard without the explanation, but I will give you a pretty good one here. We would like to explain the opportunity and limitation of what we call ORO, other resource owner gas economic. Now, I will go through this slowly.

In the top left schematic, you will see on the right the Pluto onshore gas plan. Adjacent to the left is the Pluto platform with Train 1 Pluto-Zena gas supplied directly to the platforms from nearby seafloor manifold and well installations. The distant platform, far left, anticipates our collection of our gas Woodside discoveries located remote to the Pluto platform. Therefore, the cost to bring in this remote gas is the wells, subsea kit, a platform facility, as well as the cost of the new train.

Now, as shown below and to the right, for other people's gas, it is located closely enough to the Pluto platform to flow directly. Then the cost for ORO is effectively the wells, subsea kit, as well as the cost of the new train. If ORO gas is located remote, then the ORO cost is the wells, subsea kit, distant platform, as well as the new train.

So the economic rent available to Woodside goes something like this. The best gas economically is, of course, Woodside's close to Pluto platform source. The nest next best gas we believe is either Woodside's remote gas or ORO's close to Pluto platform source. The most disadvantaged gas is ORO's remote to Pluto platform. Also shown here is the fact that if other people want equity in our facilities, they will have to pay us a towing fee or a portion of the infrastructure cost that is already built. So they get to write a big check.

Now, therefore, we're comfortable to say that there appears to be a strong economic incentive to Woodside with available ORO gas that is either 1) in close proximity to the Pluto platform, or 2) in close proximity to a remote Woodside platform installation where we found our gas. What we are not comfortable with yet is, if there is economic rent to share with a small remote ORO source or gas that is found remote to either our platforms or distant platforms with our gas or with the Pluto platform. I will tell you this we are not pursuing these opportunities at this time.

Now moving onto slide 32, I will tell you that our Pluto headstart has garnered a lot of industry interest. Actually, more interest than we at Woodside are interested in. Our Woodside Pluto Train 2 gas potential in 2013 versus next best industry offer of 2016 is a clear winner. We have had inquiries of numerous companies. We have entered discussions with five companies that we believe have material gas that meets the criteria Woodside profitability that we just explained.

Now two companies are well advanced in due diligence and negotiations. One company is not quite as advanced but is in due diligence and negotiation. Another company is considering our initial proposal, and finally, one other company is studying weather to enter a joint study. Let me reiterate, not all ORO gas will work through Pluto due to economics. Only gas that provides Woodside the proper economic outcome for the capacity used will be compensated. I would rather pass doing the bad deal and wait to cover with our own exploration potential.

Speaking of exploration, the next set of slides are ones I'm really excited to tell you about. Slide 33 is the start of a really exciting Caernarvon drilling program. What Agu and Peter and our exploration team have compiled in way of Caernarvon gas exploration prospects is really amazing. We have continued to build our acreage position within tie-back radius to Pluto. While the acquisition of five new permits has increased the number of prospects in the portfolio, more importantly, it has also added new geologic plays and diversity to the portfolio, increasing our probability of finding new gas reserves.

Now, we have divided our acreage into six hubs based on location and development scenarios to talk to you about today.

On slide 34, 3D seismic is key to derisking our present prospect portfolio, and by studying these data in a regional sense, we have been able to identify new geologic plays.

Woodside continues to build towards division of stitching together complete 3D seismic coverage of the Carnarvon Basin. In the past year, we have provided our geologists with 17,000 square kilometers of new 3D seismic. Let me repeat that. 17,000 square kilometers of new 3D seismic data. And, by the end of next year, we plan to add another 23,000 square kilometers through proprietary acquisition, purchase the data from contractors and acquisition of open file data. This level of 3D seismic coverage is absolutely unprecedented in Australia.

Slide 35. Woodside's exploration and support of Pluto now extends over 13 exploration permits, covering almost 40,000 square kilometers. Across our six hubs, we have mapped 39 prospects to drill on 3D data and have at least 35 leads still to be matured. Now these prospects range in size from .5 to 10 Tcf. As you can see, we have a large varied exploration portfolio capable of supporting Pluto expansion.

Slide 36, this slide shows examples of a variety of geological plays found across the different hubs. Some plays such as the top Triassic have been heavily explored in recent years of many discoveries, a number of which are on production today. Others like the carbon net pinnacles are examples of new plays that have only recently been recognized on new 3D data but have yet to be drilled.

Our portfolio contains good examples of all of these plays across the different hubs. Quite a few prospects have potential direct hydrocarbon indicators as we call them, DHIs, on the seismic. We are excited about the opportunity to test all these different plays in an aggressive exploration campaign.

Slide 37. So let's go through a summary of each of these hubs. While the focus on the Pluto field has been to progress the development for first gas in 2010, there is also a portfolio of exploration opportunities adjacent to and actually just below our field. With the focus shifting to Train 2 and Train 3, we have renewed exploration efforts in this area to add additional gas reserves.

Two wells we plan for Q4 this year with follow-up drilling anticipated in 2010.

Now the first well, which was called Pelion, was drilled below the Pluto field to test two possible channel sands reservoirs. The special processing of the seismic data to illuminate gas-bearing reservoirs suggests that these fans should be gas-filled. If this prospect is successful, then there are a number of look-alike prospects below both the Pluto and Zena gas fields.

The Pyxis prospect lies immediately north of the Pluto field. This slide shows the amplitude map of the target reservoir. This bright seismic amplitude response has been indicative of gas bearing sands, and we're quite confident that Pyxis will be successful.

Slide 38. Over to the Central Hub, Woodside made the Martell gas discovery earlier this year with the first of nine commitment wells in WA-404-P permit. Reprocessing of the 3D seismic has improved the data quality allowed interpretation to be pushed deeper into the geologic section. This work is now revealing seismic amplitudes, which suggests the presence of gas not only at the top Triassic as in Martell, but also deeper in the intra-Triassic section. This is an important observation which enhances the prospectivity of the region because it suggests local hydrocarbon generation in the area. As an example, the Noblige prospect is shown on this slide and is located just adjacent to the Martell gas field.

Slide 39, over to the Cazadores hub. Woodside has three permits on the north edge of the Xmount plateau. At the time these blocks were acquired, they were a considerable distance from any proven gas fields. However, with the advances in exploration and recent gas discoveries continuing to be found further north, these blocks are now immediately adjacent to this world class gas province.

Woodside has continued to focus geological and geophysical studies on these blocks to derisk the prospect. Earlier this year we acquired more than 4500 square kilometers of new 3D seismic. Interpretation of this data is ongoing, but a number of positive features are already emerging. Structural traps are clearly visible, and new seismic data are showing geometries that are interpreted to be channel sands which form the reservoir. Hydrocarbon charge is a key risk in the area, but the new data is also showing us features in the seismic that are normally only associated with gas presence.

Woodside plans to drill an early exploration well in the best prospect once the Maersk B281 rig arrives in country. Given the large number of very similar prospects, proving gas in this area would significantly increase the potential of these permits and their ability to underpin additional Pluto Trains.

Slide 40, onto our new Claudius hub. We're really excited to have recently been awarded a new permit, WA-434-P on the western side of the Xmount plateau. It was highly contested and the most sought after block around. The block just to the south with Chevron and Shell announced a few days ago was to Woodside not of as high value, and we just did seismic on it.

The Eendracht gas discovery just located east of the permit boundary and even on this coarsely spaced 2D seismic data, there are a number of seismic indications of gas nearby. Geologically the permit contains Triassic fault structures similar to proven discoveries in the area. Some of the structures are extremely large.

We have also mapped a number of carbonate reef complexes, many of which have multi-Tcf potential. Although we have just been awarded this block actually just a week or two ago, we are already out for tender for a large 3D seismic survey, and I expect we will be targeting exploration drilling in 2010, yes 2010. If this time it reminds you of Pluto, it should.

Slide 41, and last the Ragnar hub. In the first half of this year, Woodside was awarded three additional exploration permits in the southern Xmount. There are a number of Triassic and shallow or Cretaceous plays across these permits, and multiple prospects have been mapped. Currently 3D seismic is being acquired, or we should have drill-ready prospects for 2010. But Woodside's main focus remains on gas. There is also potential that these two eastern permits in this hub may contain oil. Woodside is happy with either outcome given the proximity of the blocks to our Enfield and Vincent oil facilities.

Slide 42. So, after looking at this exploration portfolio, why the hell aren't we drilling these big prospects? It is a long story, but I will give you an idea of our frustration in a short period of time.

Going into this year, we had planned to have both deepwater drill rigs, the Atwood Eagle and the new monster Maersk B281 available for the majority of 2009 this year. This new build B281 was scheduled to arrive from its Singapore shipyard in March of this year to drill our foundation Pluto-Zena wells. When it became apparent that B281 was slipping in schedule, we decided the prudent decision was to switch the Atwood Eagle from our exploration prospects to the Pluto drilling to ensure that first gas for Train 1 remained on project schedule.

Over time the B281 has now slipped out to the end of this year. Therefore, only one exploration well has been drilled so far. That being our Martell discovery. Now the B281 looks certain for next year, along with the entry of Ocean America. In the meantime, we think maybe we can squeeze possibly one more exploration well after completing the Pluto wells with the Atwood Eagle, probably the Noblige prospect right next to Martell.

In addition, we have signed a shallow water Songa Mercur semi for two wells in Q4 this year. The first well will be the Pelion located under Pluto field. The second well is presently planned to be [Alletis] below the Zena field, but there are several competing opportunities for that slot. This is probably more information than you need, but we're very excited with our prospects. We just wanted you to share in our pain of not having a rig. We have tried everything to find a deepwater rig this year but to no avail.

Now, this slide shows you our forecast of 20 exploration wells in the Carnarvon gas basin we plan to drill by the end of 2010 and another four prospects in early 2011. We have left the rest of the drill slots flexible as we know we will need to mix appraisal with prospects, and there is dependency of results that need to be recognized.

In summary, late 2009 and 2010 will be exciting times for Woodside's exploration efforts in support of the Pluto expansion.

Slide 43. More good news. We spent a few million dollars of an EPC contract, and we have now confirmed that we can fit Trains 1, Train 2 and Train 3 on the lower plateau. The upper plateau will be for Train 4 and possibly a Train 5. We see Train 4 to be 100% Woodside plan. We put a placeholder on Train 5 at this time at 100%.

Now, on slide 44 you can see the layout of Train 4 and possibly Train 5. We will need to add a second jetty and maybe a tank or two, and these studies are underway. Making something out of nothing I think is great news for our shareholders.

So we're bullish at Woodside. My 34 years of experience says it is not a matter of if, it is a matter or a question of when. We created the industry-leading position with our Pluto foundation project, and now we're going to cash in for our shareholders. Brownfields versus Greenfields, incremental economics including total economics, improved scale and scope, increasing our industry leading position. I think you just have to love it or at least I do when a plan comes together. Our folks are having a lot of fun working through it. It is just like a bunch of kids at Christmas.

Slide 45, so enough of Pluto. We have told you quite a bit about it; hope to be very transparent. Let's go on with another great project that seems to be flying under the radar of everybody, but we know it is knocking over milestones right and left. On slide 45 here we updated our Sunrise project.

Now I can't really say a lot because we're in a very delicate period in the evaluation period with our joint venture on theme select at this very time. What I can say is that all four partners, including Woodside, have agreed on resource volumes available to produce LNG. As I said, a final evaluation of which a concept is underway, so I don't want to query the process. I will say that we're very confident the project will produce robust economics. And both governments, (inaudible) and Australia are now fully engaged. As soon as we select a theme, we will submit the field development plan for approval. Now the JV is very aligned and is working to an agreed process whereby the best option will be selected.

The next two slides I will handle together, slides 46 and 47.

Slide Sunrise/Browse, on these two slides, I will give you an update of the world scale project, which we know to be Browse. Much has been written about the argy bargy going on with the partner position. But not much has been written about the tremendous progress being made over the last six months. For the Burrup option, we have continued to evaluate it with common ownership. With the North West shelf venture, we think the Browse venture has all the information it needs about this option. For the Kimberley the joint venture has created a plan that now provides all the necessary ingredients for a world-class foundation project.

But let's go back for a second and pick up the resource progress. Over the last few years, we have extensively drilled the three fields, and we now know we have at least a 14 Tcf sales gas LNG project with 370 million barrels of condensate.

Importantly, and this is really important to us, we have increased dramatically our confidence in our P90 values.

So what are the issues as Woodside sees them. First, Woodside is operator. It has intimate and intense day-to-day management involvement, and we think we have naturally arrived at the answer probably just a little ahead of our partners. Two of the major issues as far as Woodside is concerned are timing and capacity.

We all believe the economics of building a 900 kilometers onshore or offshore pipeline and an additional train or two at North West Shelf or Pluto does not stack up economically. In fact, the best Burrup economic option has come down to just the pipeline and backfilling North West Shelf's available oilage in the future.

So, let me repeat. The Burrup option has been reduced to building a long pipeline and offshore facilities and being restricted to backfilling North West Shelf oilage that might be available in 10 to 15 years with a very slow ramp-up of capacity.

This versus a typical Greenfield development at James Price Point that could have up to 12 million tons available in the next six to seven years. For Woodside the economics are compelling. The time value of our approximate 50% ownership of 14 plus Tcf in liquids is critical. At Woodside we believe the time value of PRT is also crucial for the Australian taxpayers who own the gas. As a reminder to some of our industry friends, none of us own the gas. We discover and operate. The citizens of Australia own the gas.

Now we are told by both governments, state and Commonwealth, repeatedly that the time for Browse is now, not 10 years from now. Remember, the Browse venture is not the same mix as six identical equity owners at North West Shelf. Woodside has about three times the equity at Browse compared to the two secondary partners and about six times the equity of the other two small parties. We at Woodside don't think under the use it or lose it commonwealth retention lease policy that a minority 8% partner will be allowed to cause a 10-year delay in getting Browse off the mark. Woodside is moving forward, and we have great support from both governments. Woodside is ready to finalize the Kimberley concept, initiate BOD, commence FEED and start early construction in 2011 at James Price Point.

Slide 48, let's put it all together now. You can see the tremendous LNG current position and potential of our Company. At this time we have the phenomenal North West Shelf as a base component. So Pluto Train 1 will increase our LG equity from 2.7 million tons at North West Shelf to 6.6 million tons annually. We are implementing FEED on Pluto Trains 2 and Train 3. Projects that could see our equity LNG climb to 9.2 million and 12.4 million tons per annum by the end of 2013 and 2014 respectively.

If you add in Sunrise, which I'm quite bullish on, and Browse, where the governments will ensure timely development, and we have the potential to approach 20 million tons per annum equity LNG before the end of the next decade. And then you had Pluto-4 and maybe Pluto-5 along the way. All this is clearly in the grasp of our Company, and it is in our grasp now. Woodside has a future production profile second to none of our industry peers.

Let's not forget, even if we don't find another molecule of gas, which isn't very likely, we will have enough P2 reserves in our portfolio to replicate 2008 production for the next 22 years. After all of the rhetoric about LNG products in Australia, Woodside is still the only company currently building LNG. We've built or are building six of the seven trains in Australia, and we're the only company with multiple Australian potential projects in the future.

Slide 49, what is important to our shareholders is this slide, which shows the leverage of LNG in the industry to current company capitalizations. By a wide margin, Woodside is best leveraged to our current industry and will remain so with the advantage increasing dramatically in the next few short years.

Moving over to slide 50, the question then becomes, do we have the capacity and capability to carry out these projects concurrently? You bet. We have now developed a Pluto Brownfield LNG management team to build Trains 2 and beyond at Pluto. Our Pluto Foundation Greenfield LNG management team will be ready to move to Browse in 2010, and we have plenty of FPSO subsurface project teams to handle Sunrise as Shell or ConocoPhillips will manage the construction of the Sunrise downstream liquefaction plant.

Now slides 50 and 51 gives you a small taste of our sustainability. Safety is critically important. We work hard to have a perfect day every day. We don't, but we will not slack in our efforts until we do. Same with the environment.

We have a loyal group of contractors. They've been fantastic to us. They know that Woodside builds while others just talk. I will tell you, we do love our employees. They work hard for us and we compensate them well.

And I've said enough about our leadership team. Probably embarrassing them. Let me also say that I've had the pleasure of working with two great Chairmen, Charles Goode and and Michael Chaney. Our Board of Directors is collectively a very -- is a smart group of really, really bright minds. They know everything about our business, and we make sure that they do. It is really great for a CEO to be able to work so well with their board and for everybody on the top to be so completely aligned.

One last thing, I am really enjoying my time at Woodside and looking forward to kicking a few more goals.

So now, finally, on to questions.

(Operator Instructions). Stuart Baker, Morgan Stanley.

Thanks and good afternoon, gentlemen. Just to come back to Pluto and Pluto-1, they are obviously going along pretty well and well advanced. I guess the obvious question is, what is the activity out there that you see as the most critical one that we should look at? What is the one that keeps you awake in the night. It is made in the platform in the field or topside, or is it the commissioning phase that comes out or if you like in a snapshot?

The thing that keeps me up at night is safety. I worry about our people getting hurt and there is some accident that hurts people. Behind that is the construction. We have a lot of people out there on a small site getting everything put together. But I will sell you this, that I'm completely confident in our engineering staff. The way they have worked with our EPC contractor and our contractors, boy, they risk-manage the heck out of this thing. I do not worry about the transport of these modules down to. I don't worry about the offloading them or the tracking them up. Basically it is just a beehive of activity. It is what you might call multiple tasking at the site of getting everybody making sure that people aren't in the way, that trenches are covered before we need to travel over and those types of things.

So it is a large complex project. Greenfields are really hard compared to Brownfields, and I will just say that we've kind of broken the back of the engineering. We have the modules pretty well finishing up in Thailand. We have finished up in China. We're finishing up in Malaysia. So it all turns to crop and putting it all together. This next six months, as we said earlier, is where we want to break the back of construction, and that is the key risk remaining.

Thanks for that. And just a second question before I pass it over to others, just on the financials, a bit of minutiae here. Just on the royalty end, our PRRT expense combined, particularly our PRRT obviously that is lumpy through time and quite a bit lower at this half versus last half and the second half of last year. I was wondering if you could give us a bit of guidance on what the world would look like in the second half given the fact that it is goes between zero and a couple hundred million half on half.

Just so I am clear on your question, your first question was, what has been happening to PRRT, and then what is likely to happen over the second half?

Yes. Basically.

So what has been happening to PRRT I guess up-to-date you can kind of go with two basic drivers. The first one is obsolete revenues can come down, and that is part of the reduction.

The second one is PRRT augmentation has come up. So when you kind of look at those two together, that is the lion's share of explanations for what it moves. When you look at the second half and what is going to happen, it gets back I think ultimately to where revenue is going to go. But to the extent that revenue continues to fall or stay stable, you will see PRRT kind of move in line with that.

Okay. Thanks very much.

Mark Greenwood, JPMorgan.

I've got a couple of questions just around Pluto-2 and the exploration for Pluto-2. First of all, on slide 30 where you add line I think what you called the most likely scenario for Train-2 gas supply. The discover gas there of .5, I think you mentioned that was discovered and potentially commercially acquired gas. Is it just Martell, or is Martell a subset of that .5 Tcf?

Martell is not included in that .5. I kind of looked for Martell possibly the-- maybe not the second train, in the second train.

Okay. So could you be a little bit more specific about what that discovered gas is?

I can't right now because we are in negotiation.

Okay. When you mentioned -- when you outlined the options on slide 31, you mentioned a distant platform versus gas that was close to the existing platform. How far away -- what is the maximum distance that you could expect to do a subsea tieback as opposed to put it in a new platform.

Well, it depends on the reservoir market. It depends on the natural pressure as a reservoir, the extended life, etc. If it is a big pull highly pressured, you move gas quite a ways to the platform and push it in. If your wells are shallower, less pressure, and then you are going to need compression at some time in the near future. Then you are going to need a platform or some type of facility to handle the compression.

Can you give us sort of a rough guide as to what the likely distance is before you put in a new platform?

Sure. If you go back to the -- let's just pick the slide that starts the exploration program up? (multiple speakers) Yeah, 33. Thank you.

Obviously, gas right around the Pluto platform we can pick up a set of kilometers away, tens of kilometers away directly into the platform. Clearly, 404 will take a platform hub there, and I would expect that there will be platform hubs in Cazadores and over for Claudius. Claudius is the furthest away. To give you an idea of the ranges here, I think the Claudius is around 400 kilometers. I think the central hub they were telling me is about 150 to 200. So these are all well within range for subsea throw lines to tie back to the Pluto hub.

The point we're trying to make is that a) if people have gas close to the Pluto platform that already exists and they don't have to do anything but drill wells in subsea and subsurface back, there is a huge amount of economic rent to split on that. I really don't want to use any capacity as I'm so confident of our exploration program. I just don't want to give up any capacity unless I get the same value as if I found my own gas located a little bit further away.

So people have small dabs of gas quite a ways away where they have to build their own platform. I don't think there's much use of talking about it. It's not going to be Pluto probably in the future.

So there is a distance radius, and there is kind of a deal. If Woodside builds a platform, let's say, in 404 and over in Ragnar hub or in Claudius, other people have found gas around there can tie to it, and their economic rent to split will be better.

Got it. Okay. Just one more if I could. Just on the revised exploration program that you have outlined in one of the latter slides -- I think it is slide 42 -- I was wondering if you could provide us an update on the exploration budget for 2009. It looks like quite a significant program in 2010. Do you have an estimate as to what the budget might be for exploration in 2010?

Well, I was just going over the budget in 2009. We're staying very close to what we announced earlier. We will be just a few 10 million off of our AUD408 million I think was our original budget or AUD430 million I believe it was, AUD432 million. Is that right, Mark?

So the budget was I think AUD405 million originally, so right now it was AUD408 million. So it is roughly in line with the original budget. The outlook for the full year is roughly in line with the original budget.

And then with regard to 2010, obviously as with all of our budget, that is actually what is getting fleshed out over the next couple of months, and it will be available in November. Like we do every year, we will show you capital for the next few coming.

So how is it the capital or the exploration budget is similar when you are drilling a hell of a lot less wells given that that rig is not available?

For two or three reasons. Number one is we still have an active drilling program in Brazil. We've drilled two discoveries down there. We have expectation of drilling, of course, in Sierra Leone and our Rickenbacker. But the biggest change has been we have just loaded up our explorations with the tools they need, and it is paying off big time for us. That seismic I was talking about doesn't come free. We have really loaded up on our seismic and kind of shifted the seismic program from 2010 into 2009 and shifting about -- probably I think we said six to eight wells we would drill. We are going to probably drill four wells now in Australia. So we're lacking two to four wells and probably traded that out with seismic to kind of balance out the budget.

Got it. Thanks.

Matthew Murphy, The Age.

Good day, Don. Just a question around LNG. I was interested to ask what your thoughts are in terms of demand for LNG going forward and how you are going and expect to go in regards to marketing that LNG overseas?

Let me just say that every project when you enter into FEED has to prove up certain things. You have to get gas contracts. You have to get permits, environmental permits. You have got find a location. You have got to figure out how your gas is going to flow. So, like the folks over Gladstone, they got a whole set of different problems right now they are tackling. We have a set of problems out here, etc. For Pluto we have a great head start.

We've just always have said that going Greenfield is tough. Once you have got the Greenfields set up, it makes life really quite easy when you can just build Brownfields on top of it.

So the point is, we have had I think I mentioned 2700 cargoes Woodside has operated and supplied around the world without incident. Having Australia as a home, having Woodside reputation. We don't expect unloading the gas at a very high fair price is going to be the major issue here. We currently have, as you know, two partners with us in Pluto that have purchased all the gas so far. We have got several others lined up. Selling gas from Pluto or North West Shelf from Woodside is different than a newbie who has never proven themselves before, and your sophisticated customers in Japan, Korea, Taiwan and other places, they certainly look for that. So we have got a natural advantage at Woodside. I'm not concerned about that piece of it.

We saw yesterday the Gorgon project sell 2.25 million tons of LNG over 20 years to China. Given that LNG prices are around kind of 300 and projected to go to about AUD400 a ton, do you find that AUD50 billion figure a bit inflated?

Well, first off, it was interesting the day they announced the AUD50 billion. We have got AUD45 billion of PetroChina. But I think what it shows is that there is a huge market out there for big strong projects. Australia offers that. We predict 380 million tons of LNG global requirement by 2020. We're starting to see people starting to gobble that up.

I certainly understand some of the issues that some of the other people in Australia are having trying to get a good price for the gas because of the quality of the gas and other things. But I will tell you, Pluto is a great quality gas, and we just don't see that to be a major issue.

When we talked to the board about going into FEED, we quickly pretty well, that was an issue we talked about. We have risk mitigation plans. But I think that is really not what is on my mind right now. I don't see gas marketing based on the fact that we have got a great grass marketing group. We have built customer relationships over the last 20 years. We have not ever as Woodside disappointed a customer or any other set of customers. I think if you just go talk to them directly, they will tell you that.

On your deal with PetroChina, the AUD45 billion deal which you just spoke about, how many tons does that supply and over what period, and is that finalized?

No, it is in KGA form, which is the form that we have for -- initially for -- or it is recognized for possibly Browse and on. But it is based on 2 million to 3 million tons for a 20-year period. We are continuing to progress that deal, and we think it is a great underpinning, which we have offered to our joint venture partners at Browse to participate in along with our CPC deal. Again, another 2 million to 3 million tons for Browse, which again we have offered to our joint venture to share that contract with them.

Thank you.

Matt Chambers, The Australian.

Hi, Don. I just wanted to check something you said before. Did you say you would not give an indication of how much gas you think there is at Martell-1?

Yes. At this time we do have a partner there, and it is confidential based on what that volume and those trends could tell outside our lease block.

Any indications you can give us on what sort of CapEx you would look at with the second or third trends?

Yes. That is why we do FEEDs. When we go into FEED, that is where we pin it down. If I gave you a number now, I always get hit by this and I get hurt by it. I give a number that we think is our best expectation now, and then we have to give another one when we go to FID. We have quit doing that. We said, look, we think that we would not enter a fee if we didn't think we had a robust project that gave great economics.

I will tell you this. Pluto-1 economics have done nothing but get better since we initiated FID on that. And bottom line is when we add these Brownfields and build scale and scope and split up the foundation cost, nothing but improved economics for everybody. So that is great news for the shareholders.

What happens here is the differentiation we will tell you is that our pipeline that we're building up to Pluto platforms can handle probably two trains. When we go to that third train, we will probably need to build a second trunkline.

But just about everything else is built for multi-train. I think a lot of people wondered what the hell we are doing building LNG capacity storage that had as much storage capacity as North West Shelf. What were doing building huge power plants? What were we doing with a jetty that had huge capability? Why were we building a trunkline that could handle two trains? Why did we build a platform offshore that can virtually handle four to five trains?

The idea is we have never envisioned Pluto as a one train facility. We have always -- I think my staff here always envisioned it as a three train. I have always figured it would be worth a few more than that. So we're pretty excited about where we are going.

I would say that you would take a Brownfield cost. It will be quite a bit different than Greenfield costs, and then you can use some of the industry references. I will say this. There is enough LNG projects getting announced out there that you guys can figure out pretty closely what these costs will be.

Okay. Thanks. And just one more if I could on Sunrise. What is the (inaudible) government position at the moment on that? What are they indicating?

Well, let me just say that we are in kind of a ticklish period with everybody on this thing. I really like Sunrise and how it is progressing. Our team has done a great job, and we have got great joint venture alignment on this thing.

We are engaged with the team more or less, say, government. They are talking both ways with us. When they position themselves -- let's just say position themselves in newspapers -- sometimes that is to play locally a little bit more than what it does play with our teams. So we kind of got to understand that we are going to hear a lot in the news. There's going to be a lot of around it. But, at the end of the day, it is a good project that provides a hell of a lot of revenue to both countries, and we are playing fair up with both governments. We treat them both the same.

Okay. Thanks a lot.

Adrian Woods, Macquarie.

Hi, my question just relates back to slide 30. You say there that you are looking for anywhere between 1.4 to 2.7 Tcf of gas for Pluto-2. I just wonder how that requirement for external gas sort of chimes with the timing of your exploration program, and how does that affect your ability to sign the deal?

Obviously you are sitting on a lot of interesting prospects and have an active drilling program coming along. If you find the gas organically, clearly you stated that would be your preferred option. So does that mean that you can't then sign a deal until you know what you're sitting on, and if that is indeed the case or, let's say, the exploration turns out to be disappointing, does that mean you have to go back into the market to try and secure more gas in perhaps a tighter market?

Well, that is the reason we tried to develop Trains 4 and 5 and left them undesignated right now. We are comfortable with the fact that because we made a commitment to the state of Western Australia government that in getting our permits for Pluto that we would offer resource owners to come through Pluto if it was economically viable.

I will tell you right now that there is some gas that is located so close to the Pluto platform that the economic rent split between that company that owns that gas and us is very, very economic as compared to gas maybe 400 kilometers away, and I will have to find quite a bit more Tcf to make it work. Therefore, there are opportunities there for the government is to say, wait a second, why aren't we consolidating gas around these particular hubs like we do in the North Sea, like we do in the Gulf of Mexico, etc.?

We're kind of setting up a weird thing here in Australia where you can set up haphazard infrastructure, which actually cost the Austrian taxpayers at the end of the day less PRRT rent coming back from these things. But if there was share utilization of gas in collective areas, it would make life easier for everybody and a hell of a lot more economic for the government and for the citizens of Australia.

Therefore, we live under the rules. We offer it open open for the people to come on our platforms and come through. But it has to be economic for us because it is capacity away from us.

I would say that we will drill our big prospects next year before we get too far down the road to make sure that if we hit something big or several things big that will lock up what we have. If you take a look what we are projecting right now is basically about 40% of one train -- well, first off, the first train is 90% Woodside. The second train, our best guess right now will be 60% Woodside. Our best projection for Train 3 is 75% Woodside and then 100% for 4 and 5. Add that mega tonnage up and it makes us I think this little Woodside thing that we didn't even know about five years ago to be a big winner for our shareholders.

Sure, okay. So just to go back to the original question, you would happily sign a deal before you know what discoveries you have yourself?

For a few certain properties that we have located, if the split of rent between the owner of that gas and Woodside is acceptable to Woodside, yes, we would sign it.

Just a second question. You talk about the pipeline tolling arrangements on the Pluto-2 project. You've mentioned that the pipeline can handle enough gas for two trains. What is the capacity of that pipeline, and have you got any sort of sense of what those tariffs might be?

I know what the tariffs look like because we are well into negotiations with a couple of companies obviously. But -- and it's commercially confidential; of course, I cannot throw that out here. What I would say is the pipeline that we're building is fairly good match. It is almost evenly matched for two 4.3 million ton trains.

Okay. Does the Woodside gas get monetized first, or will it be equally fed through with the polygas?

Well, if you give somebody capacity and they have gas available at day one, that is all part of the agreement. The intention is, and I don't want to mislead anybody, is day one of Train 2 and day one of Train 3, that these equity splits we have would be indicative of the capacity split between the companies.

Great. Thanks very much.

Gordon Ramsay, UBS.

I think you just answered one of my questions. If you look at slide 17, you were talking about equity ranging between 60% and 90% for Pluto Train 2 and 75% to 90% for Train 3. Can we make the assumption that is an equity split with a other resource owner, or could it be an LNG buyer?

That's a good question, Gordon. I think what you should assume is that 90% would be the equity owners of Train 1 that we would carry through in Trains 2 and 3. The remaining split, what you might call is what would be ORO. The reason we put the range in there is we still have to see people come to the table and get these agreements done.

Just another question relating to costs. Could you give us any idea what it might cost the day rate for the Maersk B281?

Yes. Again, I'm sure Maersk won't want me to announce that, but I would say the way to handle that is is that deep water rigs around the world we know they are soft in the Gulf of Mexico and they are soft maybe in a few other plays. Nothing like land rigs in the US, which are a dime a dozen. Deepwater rigs remain in great stress for most of the world.

Like I said, we looked for one this year. We couldn't find one. Australia is fully booked out. So, I guess the question I would ask is, as the services during the recession tended to come off maybe 20% to 30% of costs, we have not seen much cost reduction on the deep water rigs from the anticipation. We did sign up for that B281, by the way, several years back as part of the underpinning.

I think the industry uses figures when you add all of the boats and all of the services and everything. For us we just use kind of rule of thumb about AUD1 billion a day out there, what you might call a full coverage spread. Now a portion of that is the Maersk contract, and the rest of it is all the supply that services the contracts -- services the rigs, excuse me.

And lastly, just on the FEED commitments for Pluto-2 and Pluto-3, can you give us an idea of the total cost for the FEED programs for both those trains?

Yes. The combined cost would be somewhere between AUD100 and AUD150, and we expect we might get some help with that from some other parties.

Thank you very much.

[Van Wong], Reuters.

Hi, Don. Just a few questions here. Have you started marketing for gas for Pluto-2? And if so, were these foundation customers for Train 1 also looking to buy gas from Pluto-2 or Pluto-9?

It is Mark Chatterji. On marketing, just a couple of points. One is, we are in a reasonably constant dialogue with all of our customers on all of our projects, not specifically aimed at kind of any one of them. Number two, the foundation customers, the Pluto-1 being Tokyo Gas and Kansai Electric will be involved in Pluto-2 and Pluto-3. And so you have some marketing implications out of that as well.

Sure. Apart from you guys talking about our big hop, Chevron is also talking about the potential for third-party gas at Wheatstone project. Could you just offer some comments on you see the situation of dynamics shifting considering how you guys are now looking to expand Pluto to a fourth and fifth train?

We don't look at it as competition. I was quite amused in this article in the ASR over the weekend.

Roy and I, Roy Krzywosinski over at Chevron and I, were at a conference this week, and we were sitting together at breakfast and somebody comes running up and shows us this article that we are supposed to hate each other. That is not the case. Roy is a good guy. He has a good company he is running here in Chevron here in Australia.

There's plenty of room for everybody. We have built our plans around the fact that Gorgon is going to be there. We have modularized; we have done a lot of things. But this competition thing really is not there. Yes, we are competitive on a business basis as we are in the North Sea, as we are in the Gulf of Mexico and everyone else in this world. This is industry. We can be partners in one lease and competitors in the next lease. It's a strange business exploration producing, but we handle it very well.

They've announced their plans for Wheatstone. Good luck to them. Building a Greenfield on a pristine site and having to build the harbor and everything, they are going to have their own challenges with it. I think Roy said they would have gas -- opportunity available in 2016. The way I see it is, we'll build Trains 2 and 3 before Gorgon. In fact, our construction guys told me yesterday that we will be 12 to 18 months in front of Gorgon on people in requirements and needs. That is assuming Gorgon goes here in the next month or two, which we fully expect.

So we feel very comfortable that we will build around -- we have got construction workers that like to go into crop at night. So I mean there's all sorts of situations we've already anticipated risk mitigation of this. So I don't even worry about Wheatstone. That is kind of after Pluto gets done, and bottom line it is kind of a long extended FEED. I think it is a couple of years, and that is kind of typical with Greenfields plus. I think they have some issues probably stacking. So, at the end of the day, I don't concern myself with Wheatstone. I worry about other things that are within my control. I spend a lot of time with Browse, and I spend a lot of time with Sunrise as well as Pluto.

One last question. Could you just talk a little bit more about the construction for funding plan in 2010? You have done very well in '09 by tapping the [bond] market. So what are your options for 2010? Would you be looking to tap the bond market, or would you look at [XC]?

I will turn that over to my money man here, Mark.

I think on the 2010 funding plan, as we noted in our slide pack, that is all being worked right now as the activity plans and budgets get finalized.

As you can see from kind of our activity this year, we do have a focus and a strong preference for debt. As I've always said, you can't rule things out because you can't rule the oil price in or out. But up until now, we have gone with that. As you can see from the slide, we continue to work on the expansion of our lending capacity on a first and foremost basis.

Okay. Thanks.

Don Hirjee, Deutsche Bank.

Good afternoon, gentlemen. A question regarding Pluto, again. Now you have mentioned you're coming up for a critical phase on Pluto-1 for the cost issue. If I recall, when the Pluto CapEx budget came out, it was nearly AUD1 billion worth continuously built into that. How much continuously have you got left?

Good question. I'm not really going to answer it, except to say we're going into the most critical phase of construction at Karratha where we have put a big productivity contingency in. I will just say this. We still have a lot of contingency in our projections for final costs.

But you are coming up to the critical parts over the next six months as you say?

Let me just put it this way. If we started the project with X billions of dollars of contingency in the project, we have taken and given back to the Company, you might say, very little of that contingency at this point. Because we still have quite a bit of the risk remaining. So that contingency remains with the project unspent.

Okay. Thank you, Don.

Paul Garvey, Financial Review.

Good day, Don. I'm just wondering you have spoken at length today about needing to find a good tariff when talking with these other resource owners. Is the prospect of Wheatstone also looking for third-party gas making it harder at undermining your sales position or your (inaudible) position there?

There is a big difference between 2013 and 2016.

So, no difference there?

I'm sure they are competing, but I don't have any privy to what they may be offering. I don't worry about that. I know the proposition we have. I know the winning aspects of our proposition. I know that they have got to make money. I'm talking about the ORO, and we're putting a very justified position out there to where we both make money.

We are supplying people a hell of an opportunity. We have fantastic LNG experience. We know how to build this stuff in Australia. By the way, it is not easy, and we basically have a reputation of history and marketing. So we can give ORO an awful lot, and we can give them 2013 not 2016.

So the fact is we build LNG trains versus the competition. We have marketed this stuff. We have got a 20-year history. I mean we have got so much going in our favor. I don't worry about the competition because I know the offer we're making out there. It might be competitive by setting up options for boards to review, but I know we have got the best option out there.

They are trying to sell (inaudible). Is that an encouraging sign in sort of what it says about held for demand out of Asia, or is it a worrying sign given you are going to be in the market for more customers down the line?

It is all good.

All good? Otway, any change on the view on that?

Change in the view in respect to?

Looking at potentially selling out there?

Look, as we said on our slide, there's a couple of assets, Otway being one, that are still under review. So once we have a decision to announce, we're going to announce it.

Okay. Thank you.

There are no further questions at this time. So I will turn the conference back to Mr. Voelte for closing remarks.

Okay. Just one shout-out to my son who in the course of this business has to listen into this. It is his birthday today, so I would like to tell him Happy Birthday. And also thanks, Kevin, for making Nancy and I grandparents for the first time. And I'm sure everybody else wanted to hear that.

But at the end of the day, I appreciate everybody hanging around for an hour and 17 minutes. We had a lot to say today. We apologize for the front end, but when transparency is pretty good, we have got a lot to say. Thanks a lot. We will be around to see people here in the next couple of days, a couple of weeks over in the US, Europe, etc. So we have got our bags packed, and we will be heading out this afternoon. Thanks a lot.

Thanks, everybody.