Woodside Issues $US700 Million in Bonds

Submitted by Jim Thesiger on 5 November, 2009 - 03:27

The Australian company Woodside Petroleum (WPL), which focuses on operation and management of hydrocarbon exploration, production, marketing, development, and transportation, operation and execution of the North West Shelf Gas Project has taken further initiatives to secure funds for the investments in a number of Australian gas assets by issuing $US700 million worth of corporate bonds in the United States. Woodside has recently went for selling its 51.55 percent share that it owned in Otway gas project to Origin Energy for $US721.5 million. According Woodside, the fund generated from the bonds would be used to clear out the short term debts and for other general purposes. These five-year bonds will come up with a 4.5 percent coupon.

A market analyst have termed the recent initiatives taken by Woodside as “housekeeping” considering the fact that the sale of Otway was flagged in the past and the corporate bond was a rebalancing of some of the debts the company had. He also added that the funding movement barely had effects on the company’s outlook and $US700 million is going to be spent for the exploration for only a few years which is not transformational. Woodside has been on the move since last year to raise funds. Woodside is currently looking forward to establish a gas project in the Browse Basin which is located in the far northwest. The estimated budget for capital expenditure is $6 billion for the company for the current year.

The company faced considerable amount of trouble last month to secure gas supply for the extension of the Pluto Project as two of the potential suppliers went for a Chevron deal instead. However, Woodside stated that it was in search of some other sources to ensure the gas supply. The company expressed its determination to move forward with its plan of second stage of development for the Pluto Project and also claimed that the project is currently on the track to produce LNG in 2011 for the first time.