Moody's raised its ratings outlook for Woodside Petroleum Ltd. to stable from negative on expectations that the company's earnings and cash flow will remain at solid levels over the next 12 to 18 months.
The rating agency affirmed Woodside's Baa1 issuer rating and the (P)Baa1 rating on the backed senior unsecured medium-term note program and Baa1 backed senior unsecured ratings of Woodside Finance Limited.
Woodside announced that it will issue up to A$2.5 billion of equity, a move that Moody's expects will improve the company's retained cash flow/net debt to around 35% to 40% in 2018 and to higher levels in 2019. The announcement of a sizable equity offering along with plans to acquire up to an additional 50% interest in the Scarborough gas field from Exxon Mobil Corp. demonstrate the company's commitment to maintaining a conservative financial profile, Moody's said.
"The affirmation of Woodside's ratings reflects our expectation that the company's continued solid operating performance and the low production costs of its assets will support strong margins and generate solid earnings and cash flow through the cycle," said Matthew Moore, Moody's vice president and senior credit officer.