The case for selling Woodside

The case for selling Woodside. Profits have never been higher. Dividends, production and cash flow have all hit records while capital-expenditure and debt has plummeted; These aren't the usual conditions to support the argument to sell the largest independent oil and gas business in the land. And yet that's what we're about to do. Why? Because oil and gas fields are finite resources that deplete with production and an energy business that pays out 80% of profits risks under-investing in production growth. Production represents the recycling of one asset - oil and gas - into cash. As production depletes oil reserves, a part of profits must be reinvested to replace and increase oil inventory. Without that, producers risk a slow decline as their assets deplete. This is the worry with Woodside. It appears to have run out of development projects and will find reserve replacement either difficult or expensive. (VIEW LINK)