NiseriN/iStock via Getty Images
Woodside Energy (NYSE:WDS) dropped by 1.7% in pre-market trading on Thursday. The company announced that it will be registering approximately $1.5 billion in impairment charges related to its Shenzi oil and natural gas field in the U.S. Gulf of Mexico and the Wheatstone natural gas project in Australia.
Woodside (WDS) disclosed that most of the charges, around $1.2B after tax, are linked primarily to goodwill and part of the purchase price allotted to Shenzi on completion of the merger with BHP Petroleum. Additionally, the $300 million impairment for Wheatstone is chiefly associated with short-term pricing fluctuations.
The company stated that the impairments will not be factored in when calculating its full-year dividend. Woodside is expected to finalize its annual results on February 27.
In addition, Woodside (WDS) also reported a decline in reserves at the Shenzi assets, which offset improved performance at its North West Shelf and Pluto LNG projects.
Marcus Today analyst Henry Jennings remarked that the decrease in reserves at Shenzi and the projected impairments “could have been one of the reasons” why the proposed $52 billion merger with Santos recently failed.
