The ratings on Australian-based oil and gas producer Woodside Petroleum Ltd. reflect our opinion of the company's cost-competitive operations, long reserve life, and strong development pipeline, and the favorable outlook for the liquefied natural gas (LNG) market. Our view of Woodside's credit quality is also underpinned by the company's predictable cash flow from long-term take-or-pay domestic gas and LNG contracts with offtakers with investment-grade ratings. These strengths are partly tempered by the company's large capital-expenditure commitments, potential commissioning risks associated with the Pluto project, limited—albeit improving—geographic diversity, and the cyclical and capital-intensive nature of the industry the company operates in. Woodside recorded total production of 36.7 million barrels of oil equivalent (mmboe) in the six months to June 30, 2010,
