Impairment charges against Shenzi and Wheatstone projects
- Woodside Energy expects around $1.5 billion of impairments in 2023
- Impairments are mainly against Shenzi oil and gas field and Wheatstone natural-gas project
- Shenzi impairments primarily relate to goodwill and part of the purchase price
- Impairment for Wheatstone is mainly due to short-term pricing
- Impairments will not be included in the calculation of Woodside’s full-year dividend
- Woodside’s annual result will be reported on Feb. 27
Woodside Energy anticipates impairment charges of approximately $1.5 billion in 2023. The majority of these impairments, amounting to $1.2 billion after tax, will be against the Shenzi oil and natural gas field in the U.S. Gulf of Mexico. These impairments primarily relate to goodwill and part of the purchase price assigned to the asset following Woodside’s acquisition of BHP Group’s oil and gas business in June 2022. Woodside stated that the impairments resulted from the application of acquisition accounting principles and were influenced by higher hydrocarbon prices and Woodside’s share price at the time of the merger. Additionally, Woodside expects to recognize an impairment of around $300 million for the Wheatstone natural-gas project in Australia, mainly due to short-term pricing. It is important to note that these impairments will not be factored into the calculation of Woodside’s full-year dividend. Woodside’s annual result will be announced on February 27.
Public Companies: Woodside Energy (N/A), BHP Group (N/A)
Private Companies:
Key People: David Winning (Author)
Factuality Level: 8
Justification: The article provides specific information about Woodside Energy’s expected impairment charges against its Shenzi oil and natural gas field and the Wheatstone natural-gas project. The information is straightforward and does not contain any obvious bias or misleading information. However, the article is quite short and lacks in-depth analysis or additional context.
Noise Level: 7
Justification: The article provides information about Woodside Energy’s expected impairment charges against its Shenzi oil and natural gas field in the U.S. Gulf of Mexico and the Wheatstone natural-gas project in Australia. However, it lacks in-depth analysis, evidence, and actionable insights. The article stays on topic and does not dive into unrelated territories, but it does not provide scientific rigor or intellectual honesty. Overall, the article contains some relevant information but lacks depth and supporting evidence, resulting in a higher noise level.
Financial Relevance: Yes
Financial Markets Impacted: Woodside Energy
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article pertains to financial topics as it discusses Woodside Energy’s expectation of taking impairment charges against its Shenzi oil and natural gas field in the U.S. Gulf of Mexico and the Wheatstone natural-gas project in Australia. However, there is no mention of any extreme event or its impact rating in the article.
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