...Increasing Oil Price Exposure: Exposure to oil price-linked revenues will be higher with a rising share of liquefied natural gas (LNG) in the overall production mix for the larger Australian upstream companies. Australian LNG volumes are typically sold under long-term contracts with oil-indexed prices. Low oil prices will have a higher impact on 2015 earnings, given lags from oil price changes. Capex Flexibility, Liquidity Buffer: Any adverse impact on the Australian upstream companies' credit profiles from low oil prices will be manageable in the near term. A sustained deterioration in oil prices will, however, have a meaningful impact on their margins and trim their ratings headroom. These companies have responded through announcements of large capex and opex reductions in 2015. Liquidity is adequate with sizeable cash balances and undrawn committed facilities as at 31 December 2014. Gas Pipelines, Asset Sales: Australian upstream producers will focus on core exploration and production...
