Woodside consolidation and growth

Company/ASX Code : Woodside Petroleum Limited (WPL)
Venue :
10am Perth Convention & Exhibition Centre
21 Mounts Bay Road
Perth, Western Australia
Monitor : Mr Barry Nunn
AGM Details / NoM : Wednesday 30th April, 2014
# of Attendees : approximately 350
# Holdings represented by ASA : 1,161
Value of Proxies : $91m
# Shares Represented by ASA : 2.2m (down from 2.55m in 2013)
Market Capitalisation : $32.05b

by Barry Nunn, Len Roy, Peter Gilmour

WPL achieved a record production of 87 MM barrels of oil equivalent in 2013, with a full year of production from the Pluto project. Sales revenue declined by 7% and exploration expenditure was below previous years. WPL anticipates ongoing developments both within Australia and in wider global exploration to provide growth.

Positive free cash flow allowed a 20% reduction of debt in 2013 and the payment of a record full-year dividend of 7.8%.

The Chairman, Michael Chaney and CEO, Peter Coleman reported on performance for 2013, and outlined plans for the coming year. Mr Chaney remarked on the low debt ratio for the Company and forecast 80% payout ratio of underlying profit policy whilst circumstances permit. Mr Chaney emphasised that high dividend payout ratio did not come at the expense of growth.

The ASA supported all resolutions put to the AGM and voted open proxy votes in accordance with the Voting Intentions posted on the ASA website. All resolutions were passed in a poll with minimal votes against. The resolution to increase the directors’ fee pool attracted a 16% negative vote.

We advised the meeting that our support for the Remuneration Report was with reservations with regard to both short and long term incentive arrangements and we sought further discussions on this matter. We sought & received support from board chairman Michael Chaney and remuneration committee chairman Andrew Jamieson for further discussion on this matter in the next few weeks.

We stated that the Annual Report policy on political donations on approval by the Board is not in shareholder interests and asked for this activity to cease. Mr Chaney advised that payments to political parties were, for example, to allow WPL staff to attend information and other sessions. We asked for the opportunity to discuss this further.

Other questions from shareholders included prospects for overseas ventures including Sunrise and Leviathan as well as in respect of operating margins. Following the meeting discussions were held with directors and executives that confirmed the WPL interest in ongoing discussions with ASA.