Predictable cash flows from long-term domestic gas and liquefied natural gas (LNG) contracts; Low-cost and long-life assets; Successful reserve-replacement strategy; Improving geographical and product diversity; and Moderately conservative financial profile. Volatile oil prices and increasing long-term export competition in LNG markets; Large capital-development requirements; Exploration and potential commissioning risks into higher-risk sovereign regions; and Requirement to accelerate replacement of depleting oil reserves due to a maturing oil portfolio. The ratings on Woodside Petroleum Ltd. (Woodside) reflect cost-competitive operations, incremental cash flow from new oil projects, a successful reserve-replacement strategy, and a long reserve life. These strengths are offset by the company's limited although improving geographic diversity, higher-risk exploration and development projects, and vulnerability to oil price and currency movements. Woodside's
