24.02.2010 annual report 2009.pdf - Woodside

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12 Reserves statement (continued) At 31 December 2009, Woodside’s share of contingent resources was 1866.6 MMboe, down from 1939.6 MMboe in 2008. The reductions are due to revisions in the Greater Browse and Greater Sunrise fields as part of ongoing appraisal and development studies and maturation of contingent resources to reserves for Otway and Pluto–xena. New bookings were made in Australia for the Coniston–Novara oil field (2.8 MMbbl) and the Argus gas field (66 Bcf). In Brazil 11.8 MMbbl of oil, 82 Bcf of dry gas and 3.8 MMbbl of condensate was added as a result of the Panoramix discovery. Contingent resources in Woodside are associated with the following key assets: Greater Browse: 5892 Bcf dry gas and 154.1 MMbbl condensate. Dry gas and condensate volumes have decreased to reflect the results of concept select studies. Greater Sunrise: 1717 Bcf dry gas and 75.6 MMbbl condensate. The volumes were updated in 2009 to reflect the results of appraisal and multidisciplinary studies. Greater Pluto: 449 Bcf dry gas and 5.8 MMbbl condensate. Volumes have decreased in 2009 as a result of maturation to reserves. Western Legend seismic survey vessel Best estimate contingent resources annual reconciliation by product* (Woodside share) Contingent resources as at 31 December 2008 Dry gas Bcf Condensate MMbbl Oil MMbbl Total MMboe 9,022 259.5 97.4 1,939.6 Transfer to Reserves -140 -2.2 0.0 -26.8 Revision of Previous Estimates -510 -12.9 9.0 -93.4 Extensions and Discoveries 160 4.4 14.6 47.1 Acquisitions and Divestments 0 0.0 0.0 0.0 Contingent resources as at 31 December 2009 * Small differences are due to rounding to first decimal place 8,531 248.8 121.0 1,866.6 Best estimate contingent resources summary by project* (Woodside share, as at 31 December 2009) Project Dry gas Bcf Condensate MMbbl Oil MMbbl Total MMboe Greater Browse 5,892 154.1 0.0 1,187.7 Greater Sunrise 1,717 75.6 0.0 376.7 Greater Pluto 449 5.8 0.0 84.6 Greater Exmouth 0 0.5 74.0 74.5 North West Shelf 201 6.2 25.6 67.0 Other (17) 273 6.7 21.4 76.0 Total 8,531 248.8 121.0 1,866.6 * Small differences are due to rounding to first decimal place Woodside Petroleum Ltd | Annual Report 2009
Notes to the Reserves statement 1 ‘Reserves’ are estimated quantities of petroleum that have been demonstrated to be producible from known accumulations in which the company has a material interest from a given date forward, at commercial rates, under presently anticipated production methods, operating conditions, prices and costs. Woodside reports reserves net of non-hydrocarbons not present in sales products and upstream (offshore) gas required for production, processing and transportation to a reference point defined as the inlet to the downstream (onshore) processing facility. Downstream fuel and flare represents 10.9% of total Proved reserves and 11.0% of total Proved plus Probable reserves. 2 ‘Proved reserves’ are those reserves which analysis of geological and engineering data suggests, to a high degree of certainty (90% confidence), are recoverable. There is relatively little risk associated with these reserves. 3 ‘Probable reserves’ are those reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. There is at least a 50% probability that the quantities actually recovered will exceed the sum of estimated Proved plus Probable reserves. 4 'Contingent resources' are those quantities of petroleum estimated, as at a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature due to one or more contingencies. Contingent resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Woodside reports contingent resources net of the upstream (offshore) fuel and non-hydrocarbons not present in sales products. Contingent resource estimates may not always mature to reserves and do not necessarily represent future reserves bookings. All contingent resource volumes are reported at the ‘best estimate’ (P50) confidence level. 5 ‘Annual production’ is the volume of dry gas, condensate and oil (see Notes 8 and 9) produced during the year and converted to ‘MMboe’ (see Note 12) for the specific purpose of reserves reconciliation and the calculation of annual reserves replacement ratios (see Note 6). The Reserves Statement Annual Production differs from production volumes reported in the company's annual and quarterly reports due to differences in the sales product definitions and the ‘MMboe’ conversion factors applied. 6 The term ‘reserves replacement ratio’ means reserves change during the year, before the deduction of production, divided by production during the year. The term ‘three-year reserves replacement ratio’ means reserves change over the three years, before the deduction of production for that period, divided by production during the same period. The term ‘organic annual reserves replacement ratio’ means reserves change during the year, before the deduction of production and adjustment for acquisition and sales, divided by production during the year. 7 The term ‘ultimate recovery’ means resource volumes which will ultimately be economically produced and equals production to date plus reserves plus non saleable non-hydrocarbons plus future own use offshore fuel and flare. 8 ‘Dry gas’ is defined as ‘C4 minus’ petroleum components including nonhydrocarbons. These volumes include LPG (propane and butane) resources. Dry gas reserves include ‘C4 minus’ hydrocarbon components and non-hydrocarbon volumes that are present in sales products. 9 ‘Condensate’ is defined as ‘C5 plus’ petroleum components for NWS Venture and Otway Basin fields, but is sales product for the Ohanet project and the Gulf of Mexico fields. 10 ‘Bcf’ means billions (10 9 ) of cubic feet of gas at standard oil field conditions of 14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 degrees Celsius). 11 ‘MMbbl’ means millions (10 6 ) of barrels of oil or condensate at standard oil field conditions of 14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 degrees Celsius). 12 ‘MMboe’ means millions (10 6 ) of barrels of oil equivalent. In common with international practice, dry gas volumes are converted to oil equivalent volumes via a constant conversion factor, which for Woodside is 5.7 Bcf of dry gas per 1 MMboe. Volumes of oil and condensate are converted from MMbbl to MMboe on a 1:1 ratio. 13 Revisions representing changes in previous estimates of reserves or contingent resources, either up or down, resulting from new information normally obtained from development drilling and production history or resulting from a change in economic factors. 14 Additions to reserves or contingent resources that result from a) increased areal extensions of previously discovered fields demonstrated to exist subsequent to the original discovery, and/or b) discovery of reserves in new fields or new reservoirs in old fields. 15 As the NWS consists of a portfolio of 14 gas fields, probabilistic aggregation is more appropriate than arithmetic summation as inter-field dependencies reflecting different reservoir characteristics between fields are incorporated. 16 Reserves associated with Woodside’s interest in Ohanet are reported using an economic interest approach. Woodside has estimated equivalent reserves volumes that reflect the value of this asset, using a five-year average condensate price and an LPG price consistent with other Woodside reserves estimations. The revision in reserves reflects revised project costs, effective production entitlement and revisions to future production forecasts. 17 Includes Mutineer–Exeter, Otway, Laminaria–Corallina, Tocra, Argus, Panoramix and Neptune fields. Governance and assurance Woodside as an Australian company listed on the Australian Securities Exchange, reports its petroleum resource estimates using definitions and guidelines consistent with the 2007 Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE) Petroleum Resources Management System (SPE–PRMS). In accordance with the SPE–PRMS guidelines, Woodside uses crude oil price forecasts and, where applicable, individual project production sales contract terms or other financial products for the purpose of reserve estimation. Dry gas reserves are reported inclusive of LPG sales products. Unless otherwise stated, all petroleum resource estimates are quoted as net Woodside share at standard oil field conditions of 14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 degrees Celsius). Woodside has several processes to provide assurance for its reserves reporting, including Woodside’s Reserves Policy, management standards, staff competency requirements and external reserves audits. The audit program is aimed at having all major reserves bookings verified, as a minimum, every four years. More than 95% of Woodside’s Proved reserves have been externally verified by independent review within the past four years. The Reserves Statement has been compiled by Mr Ian F Sylvester, Woodside’s Chief Reservoir Engineer who is a full-time employee of the company. Mr Sylvester’s qualifications include a Master of Engineering (Petroleum Engineering) from Imperial College, University of London, England, and he has more than 20 years of relevant experience. Mr Sylvester has consented in writing to the inclusion of this information in this report. Overview 13
Page 1 and 2: Annual Report 2009
Page 3 and 4: Performance at a glance Production
Page 5 and 6: Chairman’s overview The quality o
Page 7 and 8: gas assets and infrastructure in Au
Page 9 and 10: $ million 2,250 2,000 1,750 1,500 1
Page 11 and 12: 'Woodside Donaldson', Samsung Heavy
Page 13: Review of assets North West Shelf P
Page 17 and 18: 1990 First gas and condensate produ
Page 19 and 20: North West Shelf Karratha Gas Plant
Page 21 and 22: Mutineer-Exeter oil field INTEREST
Page 23 and 24: The platform substructure (or jacke
Page 25 and 26: Browse LNG The way forward to deliv
Page 27 and 28: Other international During 2009 we
Page 29 and 30: Health and safety We believe that t
Page 31 and 32: Our business principles Woodside's
Page 33 and 34: Michael A Chaney, AO BSc, MBA, Hon
Page 35 and 36: Corporate governance statement Cont
Page 37 and 38: 2 Board of Directors 2.1 Board Role
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2009 $m Statement of comprehensive
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Cash flows from/(used in) operating
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Issued and fully paid shares (Note
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1. Summary of significant accountin
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2. Operating segments (continued) (
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3. Revenue and expenses (a) Revenue
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6. Dividends paid and proposed (con
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11. Other assets (a) Other assets (
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14. Other plant and equipment (non-
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20. Provisions Consolidated Restora
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23. Retained earnings 2009 $m Notes
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25. Financial and capital risk mana
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27. Employee benefits (a) Woodside
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28. Key management personnel compen
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31. Contingent liabilities 2009 $m
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33. Joint ventures (continued) (b)
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35. Subsidiaries (continued) (b) De
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In accordance with a resolution of
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Number of shareholdings There were
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Key announcements 2009 JANUARY Wood
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quick reference guide Africa 11 Air
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10 year comparative data summary Ye
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24.02.2010 annual report 2009.pdf - Woodside

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