Moody's revised its rating outlook on Inpex Corp. to stable from negative after the Japanese oil and gas explorer and producer completed commissioning for Ichthys, its $40 billion liquefied natural gas project in Australia.

As part of the rating action, Moody's affirmed Inpex's issuer rating at A2.

Inpex, operator and 62% owner of Ichthys, expects production to start soon, with the first cargo shipment likely before Sept. 30.

Moody's said Ichthys is key to Inpex's credit quality and the first shipment is an important milestone for the project, which is projected to comprise more than half of the company's net income and cash flow when it reaches full production.

"The stable outlook reflects Inpex's credit profile becoming more settled with the construction on its Ichthys mega-project now complete during a period of favorable oil prices," said Moody's Vice President and Senior Credit Officer Mariko Semetko.

Semetko said Inpex's leverage would improve over the next 12 to 18 months as Ichthys begins operations.

Moody's said Ichthys would generate stable cash flow because the majority of its LNG output has been pre-sold under long-term contracts with owner-customers.

Inpex's other operations would contribute higher cash flow due to improved oil prices and would support the company's financial performance, according to Moody's.