Woodside to modify accounting approach

Woodside says it is planning a major growth thrust over the next few years and in preparation for this will modify its accounting approach with respect to exploration costs, effective the 2002 financial year.
This will align Woodside's treatment of exploration costs with the successful efforts approach adopted by most of the major exploration and production companies world-wide.
As a result of the changes, Woodside will now expense the costs of drilling all exploration wells unless they result in the discovery of commercial hydrocarbons. All other exploration costs, including general permit activity and geological and geophysical costs will be charged to exploration expense when incurred.
The adoption of this accounting approach will result in a total one-off reduction to Woodside's accumulated exploration and evaluation costs of between A$700 million and A$800 million after tax, reducing the company's reported net profit for 2002 by that amount.
In summary, the changes lead to a closer relationship between the results of the exploration and evaluation activity and Woodside's reported financial performance. It will result in lower carried forward exploration and evaluation costs and lower amortization charges in the longer term.
12/11/02