Ladies and gentlemen thank you for standing by, and welcome to the 2016 Full Year Results Presentation Investor Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session [Operator Instructions]. I must advise you this conference is being recorded today, Wednesday, the 22nd of February, 2017. I'd like to hand the conference over to your first speaker today, Managing Director and CEO, Mr. Peter Coleman. Thank you, sir. Please go ahead.

Good morning, everyone. Thanks for joining us. With me on this call this morning is our CFO, Lawrie Tremaine and I really do appreciate that investors dialed into this call. I know it's a busy time of the year for all of you. So, it's been a busy year for us. We've boosted our production, grown our portfolio and we've set ourselves to make shining goals for 2017. You'll see a standard disclaimer on Slide 2 and just a quick reminder that this presentation does contain some forward-looking statements and that all of our reported numbers are in U.S. dollars unless otherwise stated. We'll kick off with Slide 3 with our financial headlines. You'll see our [indiscernible] $968 million, diluted to fully paid dividend of $0.83 per share to our shareholders. Really strong result given we've just passed through what we hoped is a low point of the commodity cycle. Our net cash flow from operating activities increased to $2.6 billion and free cash to $114 million. Those increased but operating cash flow and free cash flow, even though the realized prices year-on -year were down almost 20% and at the same time we've -- gearing is 24% and well within our target range. We remain one of the few NLP Group that was opened to maintain its credit rating through the low point of the commodity cycle in 2016. Moving onto Slide 4, I think it's fair to say that in 2016 we delivered operational excellence, successfully managed risk and volatility and added near term value growth to our portfolio. Our overall production climbed to 94.9 million barrels of oil equivalent in 2016, the second highest level on record and our trade out facility achieved record LNG production. Our increased focused on cost efficiencies and reliability which reflected in…

Thanks Peter and good morning everyone. I’ll provide a brief overview of our financial performance starting with the profit bridge on slide 13. Not surprisingly oil price had a very significant negative impact on profit in 2016, $831 million pre-tax. However, we were able to mitigate much of this impact through continuing strong operating performance, particularly in our LNG business. Our average realized process were 18% lower than 2015. The LNG benchmark price was an average 36% lower for the same period demonstrating the value of the LNG contract portfolio. Production volumes on Slide 14. We had a great year in our operations, exceeding the top of the production guidance, delivering our second highest total result and setting a new LNG production record. Pluto facility utilization was a major driver of this result. We achieved 99.5% reliability in 2016 with 300 days of uninterrupted production and exceeded the original design capacity by 16%. Liquids production was lower in 2016, mostly due to the Okha FPSO turnaround and vessel dry docking in the first half. We’ve very proud of what we have achieved over the past three years in driving our costs lower. Slide 15 shows the cost performance of both North-West Shelf and Pluto. Pluto unit production cost, it's fair to say we're $3 per barrels of oil equivalent, 15% lower than our 2013 productivity program baseline. We’ve delivered this cost reductions well completing 99% of our planned maintenance activities for the year. Moving to Slide 16. This chart compares our EBITDA margins with those of our peers. Woodside's ability to generate cash margins has consistently outperformed our peer group this period. The EBITDA margin for the year was 67%, highlighting a strong competitive position, which reflects the quality of both our assets and off side contracts and world-class operating performance. On Slide 17, we generated free cash flow of $140 million in a year, which started with oil prices as well as $28 a barrel and also funding two significant acquisitions. Now investment expenditure in 2016 was focused on delivering near-term growth with the 70% of our base capital expenditure invested in projects due to deliver production within three years. Wheatstone and the greater infield oil development are the most significant of these projects. Turning to the balance sheet on Slides 18 and 19, we’ve maintained a gearing within a target range of 10% to 30%. We continue to fund the company with relatively low cost debt. Our portfolio cost of debt is currently 3.2%. We had $2.7 billion in the available cash and undrawn debt facilities at year-end and we had negligible debt maturing in 2017. Consequently, we’re maintained the flexibility to fund their growth plans and to capture additional value created growth opportunities. With that very quick summary, thank you for listening and I’ll pass you back to Peter.

Thanks Lawrie. As I said, we’re focused on building near term value growth. And in 2017, Wheatstone, the Senegal, Myanmar and Pluto really are leading the way for us. It's not in any way to say we’re not pursuing our other opportunities. In fact, we are, but these will be our priorities this year, and you'll hear us talk lot more about them. When fully operational, Wheatstone will add more than 13 million barrels per year of annual production to our portfolio. And this year we're supporting the operator to a [indiscernible]. At the SNA oil field in Senegal, a two well appraisal program is underway to improve our understanding of the reservoir and then form development planning ahead of first oil between 2021 and 2023. In Myanmar, we're about to start a significant drilling program that includes a minimum of two appraisal and two exploration wells, with scope for an additional three wells this year. In fact [indiscernible] arrives shortly. This program will improve our understanding of the resource basin and will form the basis for identifying a pathway to commerciality. Closer to home, we're evaluating opportunities to maximize our investment in Pluto plant to tighten further capacity enhancements and mid to large scale expansion. We're looking at how we create value to accelerating development timeframes in production, capturing unallocated resources from the [indiscernible] basins and creating new markets for our product. Woodside is in a unique position in the build for having equity in both key onshore infrastructure and offshore resources. In fact we're the only Company who has equity in both the largest undeveloped offshore resources and then the two onshore plants that have the most ready expansion capability. As part of our drive to grow the LNG fuel market, we're finalizing plans to support supplying LNG from Pluto to fuel the local mining and marine sectors. And these opportunities give a -- we're focused on creating a hub that will maximize value from existing -- and investment and to ensure that those facilities are able to maximize their investment life. To recap, on 2016 our production performance reduction in our operating cost improved margins, and the progress of our key products diluted value per shareholders, despite what was a challenging external environment, particularly driven by the commodity markets and new supply in LNG. With that I'll close the formal part of the session and I'll open up to questions.

Thank you. [Operator Instructions]. Your first comes from the line of Dale Koenders from Citigroup. Please ask your question.

Couple of quick ones. Firstly, you've talked about the expansion potential of Pluto. What capacity exists there for deep bottlenecking?

Yes Dale, there's two parts to Pluto. One is a small-scale expansion using existing resources, mainly accelerating the tailwind of Pluto into the economic life. The second one then is capturing new resources outside of the existing permit areas. And they will have two development options associated with that. The first one will be small scale expansion. It will be in that 1-million-ton range, 1 million ton to 1.5-million-ton range. It might be classic debottlenecking. We know to complete a high rate test in the plant sometimes during second quarter to determine whether that's the best option. Or it may be a commoditized trying that we can just simply purchase on market and plug into the plant, which gives us the earliest possible timing for development. So that's the first part that's really focusing on bringing forward Pluto and bringing it into the economic life. The second part then is really setting Pluto up to be competitive to catch the undeveloped resources out there, Mexica probably in two parts, this discovered undeveloped resources being at Scarborough and Browse that we want Pluto to compete for. And there is also undiscovered potential in the drilling of two exploration wells that Woodside has in our portfolio being swell in the middle of this year and friend [ph] in the middle of next year. But those are multi TCF type prospects, that have already been improved internally and we have the contracting underway already for the drilling rigs for those wells. So that gives us the confidence that we can start to go through our developing planning activities now and we hope to finalize our concept select for the first phase of that thing, either that small scaled expansion or debottlenecking sometime in third quarter of this year and then make decisions to move forward from there.

When you look at the opportunity for the larger scale expansion for Scarborough or Browse through the Pluto hub, do you think that it is potentially providing sufficient returns in current market conditions in terms of our LNG price in oil, or do you need a recovery in LNG markets or high pricing through bunkering of transport fuels?

No not really. It's really up to the owners of the facilities to decide what sort of returns they want in the long term with those facilities. So it will be -- obviously, Pluto and North West Shelf will be competing for that. It will be the best commercial outcomes. So obviously both those resources at the moment have a concept for a floating LNG development. And so I think there's both an opportunity and a challenge for us, and particularly Woodside is an owner and operator of both North-West Shelf and Pluto, to be able pull full day investment opportunity and take advantage of what's already pretty much on cost in that business. So if you look at the opportunity for us to bring forth the tale of Pluto, that actually then provides capacity as the backend of the plants, to then compete for some of that larger resource. So there's two elements to this. One is obviously an economically driven element with respect to bringing fort a tale that that would otherwise have a low present value, because it's so far on the future at a very competitive price. We think we can get it away at Gulf Coast type development costs. And that then provides the opportunity for us to complete very seriously for that larger scale gas that could come in from the mid-20s onwards.

Okay, and then just in terms of the focus on transportation and marine, do you think that provides -- in terms of the realized pricing through that you have in either markets, do you think price was similar to traditional LNG markets or less or more?

Well, the good part about it is if you think about the market, you have got excellent buyers in the market. One of things we often struggle with, as you know, when you get down to [indiscernible] is being able to find the quality of buyers in the marketplace in the quantities that you need. When you target the mining industry, now you've got very credit worthy buyers that have a long life and currently paying diesel fuel equivalent pricing. So we believe we can deliver it into that market at a discount to current diesel fuel pricing, delivered to the mine that will be very competitive. And we believe that when you add that to some of the other issues that as responsible corporations we're having to deal with around emissions and so forth, it's a great balance of payment story for Australia. It's value adding to a product here in Australia rather than simply exporting it. There's very compelling story and case around this and we try to leading the way by this establishment not only the truck loading facility at Pluto, but then also in the 20 industry studies that we're doing, and then our commitment to changing out supply vessel over to LNG if you would and we named the first of those vessels earlier this week.

Your next question comes from the line of Adam Martin from Morgan Stanley. Please ask the question.

Just on sort of more mid-term growth, and also as it comes come around Senegal in particular, can you just sort of walk through how that's going -- you've got five wells in the structure at the moment, you got two more planned for this year. Is there potential appraisal wells following that, and can you talk about [indiscernible].?

Well as you know Adam we currently drilling SNE-5 well and appraising that. So I would say the results so far are in line with our expectations on that well. We've got some more -- as we're not completed yet in the appraisal program. The plan is to move from SNA-5 then to SNA-6 depending on the result -- final results of SNA-5 and conducting interference test. That will give us a pretty solid view then of what the upper sands look like, and what the connectivity will be and what expected productivity would be. The next part of the program then will be the joint ventures looking at exploration prospects and both the opportunity and the ability to drill out some of those exploration prospects, particularly given the very low cost we have for the current drilling rig which has been published in the marketplace, some of the other [indiscernible]. So, there's an opportunity cost for us here at the moment as well. With respect to moving forward on the selection of the concept and so forth, as you know there's hard end on this in nearly 2019. So the joint venture is very, very focused on making sure that we appraise the entire permit areas, both the shell and deep water, and at the same time move forward with the development concept which of course Woodside has a team working very closely at the moment Kansas [ph] operator on selection of development concept.

And further appraisal wells after five and six? Is there potential there -- I see one [indiscernible]

Really can't tell Adam as to what we'll need with respect to appraisal wells after five and six. I think the real focus after five and six is going to be delineating or drilling at some of the exploration prospects that we see. So that'll be the early focus for us. At this point we've got a contingent opportunity maybe for another appraisal well but this is not a business case at the moment for the drilling [indiscernible].

Your next question comes from the line of Ben Wilson from RBC. Please ask your question.

I just want to revisit the earlier question about the market opportunity with respect to transport fuels, and Peter if I can ask you something you've referenced before both cost to home and further abroad. Firstly, I think I recall you maybe mentioning that the aggregate opportunity in the WA market is split between yellow kit and oil trains of about 400 million a day. Firstly, is that still the size of the market that you are looking at for that opportunity? And secondly further afield, as you looked for LNG displacement of bunker fuel essentially, what do you see as the absolute upside and then realizable volumes in that market because I think it could be an absolute [indiscernible] number if you assume a reasonable amount of displacement in that market?

Yes, look good question, Ben. I'd probably put it at the moment into liters of fuel equipment, because it kind of helps us as we're speaking externally because people will recognize the numbers. So if you have a look at the total amount of diesel fuel currently imported across the Wolfe at Port Hedland and Dampier, mainly to support the mining sectors, it amounts to about 3.5 billion liters per year. So it's a very-very significant number in that regard. The total market potential there, depending on how you split it could be anywhere between the half of million tons per annum plus in that regard, and there's a lot of cost to that. The other market then is the transportation ship. So the carriers taking principally iron ore up to China, and we've launched a joint industry study on that, and we call it the Green Corridor to China. That market is about another 5 billion liters per year our fuel equivalent as well for us. I think to me that's the real blue sky in the marketplace, is if we can get that away, then that starts to multiple itself globally, and we are starting to -- I've mentioned previously, demand is driven by two factors these days, and we obviously see that on the east coast. One factor is of course what we have in the slides, which is the classic macroeconomic factors that relay energy demand to duty free [ph] and where we think that demand or what that mix will be. The second one simply is government actions or government intervention based on what the population at a particular point in time or for nation's energy security nodes. In Australia, there's two opportunities for us. One is if we can convert LNG to fuel and Australia starts to deal with one of its issuers in that it does not have enough fuel reserves in place to make international standards. So that’s' one issue that gets addressed. The second one then, as you go around and look at the users of the fuel, printing out gas emissions and particulates becoming more and more and important to them, we think LNG today, because it is more readily available and it's being marketed in quantities that people can get access to. And it's pricing now is a compelling option in that marketplace, that the switching is just going to continue to occur, and we're starting to see ports take action with respect to shipping. We've seen a recent European Union ruling on shipping that transits [indiscernible]. You've seen Sydney Harbor as recently as December of 2016 for a new emissions controller overlay on ships coming into Sydney Harbor. And in our view, that is just going to continue to roll-on. So there is a real upside and I think that's the shooting the lights out opportunity for us in the marketplace.

Your next question comes from the line of Nik Burns from UBS. Please ask your question.

Look, first question is on the Pluto hub. I’m just wondering how you can compete against North West Shelf to attract third party volumes given North West Shelf has spare capacity emerging from 2020 and you would have to spend money to develop additional LNG liquefaction capacity. And also just on Pluto, just in terms of your base case, what are you currently forecasting as your economic loss for Pluto given the current plant capacity?

All right. Well, Nik, two parts to that question. Wherever the gas flows, and we don’t feel on our commercial basis. So Pluto is going to have to compete against whatever offerings North West Shelf has. As you know, North West Shelf is currently investing in its future through five extension projects. So we call at the Burrup hub. The focus this year is on Pluto, but our view is over time you’re having the connectivity between the plants. You'll have shearing between the plants. So we’re looking at most capital efficiently on the Burrup peninsula. With respect to how does Pluto compete? Well, there's two things I mentioned previously. One is we're working hard to bring the tail forward. So the natural advantage that North West Shelf has over the next 10 years is capacity is starting to develop in the plant. We’re looking for options to say how we can develop capacity in Pluto either physically or through our contracting processes in the future. That allows us then to open-up Pluto as a pretty compelling plant. The numbers, we’re not that far off to be honest with you Nik. If you look at the minimum economic size Pluto needs to be, like it is running now, consistently pumping up around 5 million tons per annum. And with a small-scale expansion, you can see we’re starting into the high-5s, low-6s. It doesn’t take much more than that, and suddenly Pluto now, it’s competing head-to-head with respect to the capacity that’s needed for those other the resources. So we’re starting to think through this and how that might come about, both through accelerating the life of the field bringing it forward through the small-scale expansions which will taper themselves to non-regret [ph] opportunities. And then thinking through the way that we market our product and the structure, some of our contracts as we go out into the future.

Okay. That’s clear, thanks for that. And just my other question is about LNG re-contracting. So you flag here, you now have 88% of 2017 LNG volumes under contract. I think you had a target of 85% to 90%. So it looks like you hit that. I'm just wondering, two things. First of all, it took a little bit longer than you were expecting to write those new contracts up. I’m just wondering we’re in an environment at the moment where you've had split LNG prices. Did that help in your price negotiations? I'm sure you wouldn’t what the process are. But that’s the first thing. And secondly, what’s the duration of this contracts? Like how should we see your contracted LNG position look like through 2018 and 2019 now? Thank you.

Well, it’s probably easy to answer the second part first. Some of those contracts have about 2017 to 2018. So they cost both years. In that regard I don't have the number in front of me to tell you what the cover is on 2018. So I wouldn't assume it's 88% at this point. But you can see we've been able to get contracts, and you're right. We've closed on a couple of deals post the close 2016. Yes, it does help with when you are in the market selling things. So our view is there were some volumes that were put away early last year through the middle of last year that were at prices that were just too low for us, and we wanted to hold onto them. So it wasn't that there was a lack of opportunities in the marketplace. It was just simply the price point at which Woodside wanted to compete for those opportunities and that was okay for us. Our focus has really been making sure we maintain value rather than going to shoot new market, which -- and people have different strategies in that regard. So we've got good slopes on them. They're competitive slopes in today's market. So we're pleased with them. We're pleased to get them away. The counterparties -- we have good counterparties, and we look forward to doing more business with them. So we continue to build our customer base as well.

Your next question comes from the line of James Redfern from Merrill Lynch. Please ask your question.

I just want to ask about Scarborough as well. I would have thought that fuel to Scarborough to North West Shelf was a third option given the production decline expected from 2020 as opposed to directing the gas to Pluto -- through the expansion Pluto. So that's the first part of the question. And secondly how do you think about Exxon as the operator of Scarborough being willing to have that gas, develop the feet, North West Shelf and Pluto, given that they may want to prioritize their gas resources in P&G and which will also be used to produce LNG.

Firstly on the Exxon part, we're pleased that Exxon is the operator of Scarborough's. It's being well documented. They are a world class client and a world class executor of projects. They're also very commercially focused and unwavering in their focus on the commercial outcome. So the opportunity for both Pluto and North West Shelf is to provide a compelling economic case for the Scarborough joint venture, as distinct from what is currently the base case which is filing LNG options. But from that point of view, we're very pleased to have Exxon as the operator, very pleased to be in there. With respect to portfolio management globally, now it has the capacity to fund pretty much anything it needs to at any point in time. So I'm not in any way worried about the prioritization of assets and so forth. Again, it will be just what's the best one to move forward at the right time. So for us it's present the opportunity. Scarborough can run -- as per our scan, can run through all the Pluto and North West Shelf. And as I mentioned earlier I think it's incumbent for the joint ventures in both Pluto and North West Shelf present the very best case to ensure that gets through there, and what I'm saying today is we're starting to take a lead on that, because we're in a unique position as that we're the only company that is in the four assets that really matter in this equation, being Scarborough, [indiscernible], North West Shelf and Pluto, and we operate three of them. So if anybody can pull this together Woodside should put together the challenge that we have decided to take on. We are making investments in Pluto to enable this to happened a non-regretted attractive economic investments are going to dilute the near-term value for our shareholders. At the same time, we are going to provide those longer-term opportunities. If we don’t take these actions, then it's difficult for us to get some of this away and sort of we decided this is the right path for us.

Okay, thank you very much. And another question on the gas cost. The declines in last few years have been solid. So should we expect that the gas cost of Pluto North West Shelf ran at that $3 stage, where our CT level should stabilize going forward assuming stay production from both paths, or do you think there is room for further cost reductions? Thanks.

Yes, look James, what I would do is I'd take a kind of three or four year running average, because Mike was looking at me, and of course we do turnarounds from time to time, which will affect cost in a particular year. But you can expect that our expectations, this cost base fits the new base for us as we move into the future. There are additional opportunities that we are looking at to change that cost structure, and we look forward to sharing that with you at our Investor Briefing Day. Early in that development we wanted to make sure we have got some more certainty to it before we share it with you. But I would say this is unfinished business for us and we are now looking at the next round of opportunities.

Your next question comes from the line of John Hirjee from Deutsche Bank. Please ask your question.

Peter, one of your LNG peers indicated this week that they are starting to see some tightness in LNG markets and that the tipping point, which most think was early 2022, 2023 could be earlier. I just wanted to get your perspectives on that and see what you are seeing in the market. Do you think it's tightening potentially earlier than what most of us had generally thought, or is it do you think it's mainly to do with current spot markets and weather parts?

No, look I read those comments John and I would I would concur with them. We've actually said this quite consistently that we actually see more opportunity in the nearer term for the market to come forward rather than for the market to go back. And the reason for that has been manifold, but one of those is of course we are seeing a completely new customer base coming to the market, and for those of you, we had conversations three years ago and what is the headwind of FS values, what is the headwind of more shipping in the marketplace, what is the headwind of more flexibility in contracts mainly, and basically [indiscernible] completely new customer base starting to present themselves. And you've got good look choice for that with the expansions that are currently happening in places like Pakistan for example, and Bangladesh of recent time. So Philippines is looking at it, Sri Lanka and others. So it's growing very quickly in the short time as the market for LNG last year grew very, very quickly, and China can switch -- we're starting to see some of the topline [indiscernible] in China get delayed. So we expect more there. So now we expect it to move quite quickly. The other thing and -- and so it could come forward, but it will be a different market with respect to the investibility into that market. And what I mean by it, at what point is a large buyer coming to the market and underpin a project again? And it's not clear to me, at least over the next two to three years where that large buyer will come from. Most of them are saying at the moment that they only want equity volumes, which is an indication that they'll take a larger proportion of the senate [ph] interest in projects and so that then says small scale expansions, low cost small scale expansions, and selling into portfolio. Those companies that have those opportunities will be significantly advantaged in my view over the next three to four years, because they'll be able to take advantage of this market and the get the product away. The big projects will still come, but they'll come kind of one at a time rather than this big precision that we've seen in the last five to 10 years. The other part to it is the new uses for the fuel; and it's something to think about. I've mentioned LNG fuel in Australia, but there's huge opportunities in China. The India market is a huge opportunity as well. 70% of transportation fuel in India is used by two-wheelers and tuk-tuks. That's a ready market for compressed natural gas. And so the usage of our product can really take off in some of those markets if it's made available. And that's why Woodside is leading the way here in Australia, by making a product available through our truck loading facility that we're building at Pluto.

Another question if I may. Can you just give an update in terms of your Gulf Coast strategy? You had some preliminary agreements for there for uptake and potential investments. I understand why Canada fits. So that's fine but more about the Gulf and where you're at there?

Well we have two projects in the Gulf. One is at Port Arthur and we're moving just through the approval process on Port Arthur. As you know that's -- it's kind of a two-year process for us. It's a low cash burn at this point and then we'll get to make decisions depending on where market is at the end of that. The other one then is volumes coming out of Corpus Christi late 2019, early 2020s. At this point we haven't been able to place those volumes. We've got options. We've got many options, when it comes down to that price point again. So, I'm not feeling distressed at all. We're pursuing a number of opportunities, particularly around the Americas, as distinct from Europe for that and we'll also be looking at placement around the West Africa area as well for that. So that may require some infrastructure build for us to get that away; and without giving too much away, that's kind of what we're looking at the moment.

Your next question comes from the line of Dale Koenders from Citigroup. Please ask you question.

Just following up with the second question, I thought someone else was going to ask. You target 15% production growth out to 2020. What do you think the market is actually missing to me to give this guidance? Is that around Wheatstone debottlenecking? Is it market underestimating greater crude oil production, Canada Domestic Gas, crude oil sustained production [indiscernible] where do you think the market is seeing your production outlook?

Well Dale a lot of it is already dialed in. So I would say we're pretty firm on that production outlook. Obviously, the starting point of this year. And so you've got Wheatstone Train 1 and Train 2, Domestic Gas, greater end fuel coming in. You've got a Greater Western [indiscernible] coming into the fold as well. So there's a lot of growth from what people would have been advised forecast through that period. The upside to it then is what can we do at Senegal? Can we accelerate that and bring it forward? Is it an early production system opportunity for us there and we'll look at that? That probably would be more the front end of the window that we've described for late 2020 early 2021 sort of window. So that's their portion [ph]. And then other one is we've talked about that will come again in that later time prime that probably post 2020 will be what can we do on expansion in our current facilities and some of this work is pretty quick to away. We don’t have a timeline on it yet, and again I'll show you more of it on briefing day.

But I guess the 15% upside on the midpoint of calendar year 2017 guidance gets you to about a 100 million barrels of oil equivalent. And so the common interest -- the confirmation is that exclude any unsanctioned projects. So that would exclude outside from Pluto and Senegal?

Correct. So there is more upside to that and I look forward to sharing that with you later. So I would say the mine which, there is more upside than we can see to that than downside, given that they sanctioned projects.

Okay and then just finally on what are the learning lessons you are seeing from Pluto that you can allocate towards the Wheatstone project and sustain cost about a $1 BOE lower than the guidance on Wheatstone and Wheatstone production set in MBOE is a name plate number rather than I guess that very strong deep bottlenecking as [Indiscernible] in Pluto?

Yes, I looked and there's probably three things. Firstly, you know we didn’t get ahead of ourselves. We are starting to talk about deep bottlenecking. So if you recall the original conversation which were around let's get this plant safe and reliable, so that we can set a good solid baseline on what it's going to cost us to operate, and that was the first thing, to get the plant stable and then understand the cost structure. The second part to that thing is as we look through the cost structure and the reliability of the plant, and it's two-fold here. One is reliability. So we are getting more out of it. The other part being is it's causing us least [ph] to do that, was we opened everything up. We basically -- every paradigm that we had around our other operations that we had applied to Pluto, we challenged and we went through a rigorous two year process on challenging everything that we are doing and then we introduce technology -- relatively cheap technology compared to the investment plants to make sure we're using the very best tools and having our people monitor the plant. So it really was breaking mold on the way that we think about operating the business fundamentally, and it's just it's been sustainable. We believe it's sustainable and it just continues to go. So the guys just continue to find opportunities for us.

And you think you can lead Chevron through a single process on Wheatstone?

We were already talking to Chevron about it and the relationship with Chevron is very strong. It's a very open and robust relationship and we've already put that opportunity in front of them. And it's something that I think they will be up for, but what we got to do is work with them to get through this initial start-up period. We do have a separate team with them talking about what cost opportunities look like and then also importantly how we can share infrastructure. So the infrastructure we often talked about are the big plants but of course in this instance it's about logistics, supply basis and so forth. And it's about ensuring that we -- we're a lot smarter up in the pilgrim [ph] now about the way we manage turnarounds and so forth, to make sure we resource level appropriately across all of those assets.

Your next question comes from the line of Mark Wiseman from Goldman Sachs. Please ask your question.

Good morning, guys. Thanks for the update. Just a quick couple of questions on parity. Your tax expense in 2016 was fairly lot. We assume it looks like net zero parity. I just wanted to ask about the review that's underway, and firstly whether you sort of have any update on how that is progressing, what you expect the outcomes to be? And secondly when do you expect to start paying the parity on Pluto?

Hi Mike, it’s Lawrie. Look, we’ve been engaged with [indiscernible] review team since the late part of last year. To be honest, we support that review in large part because we want an educated, well informed public discussion about [indiscernible] rather than an ill-informed debate and particularly through the medium. So for that reason we’ve cooperated. We pertain -- and we’ve provided them with some information about our faculties and our modeling as we see it. So it’s difficult to say where it's headed because we're just one of the stakeholders that are providing input to their process. I guess from our point of view though, we see [indiscernible] is working exactly as intended and that is, it's been successful in promoting investment in Australian gas. But to put it bluntly in resources that are marginal, compared to resources in some places in the world, I would put it to you that many of the developments that have gone ahead probably wouldn’t have gone ahead under a royalty regime. And so to that extent, [indiscernible] has been successful. You can evidence by the amount the investment that we’re seeing in Australia relative to other places with more onerous regimes. And so a large part of our dialogue with the government is to point that fact out. You know that we've been unable to take an economic investment decision on Browse and that just further reinforces the point that the projects bear about as much tax as I can today and significantly more onerous regime can undermine our possible future investment. You have a model of Pluto. So I’m sure you have a view about when win [indiscernible] will be payable from that particular facility. But you also know that it depends on all the assumptions that you make in that analysis. So it depends. We do think [indiscernible] will be payable at Pluto. You can see that in the fact that we maintain significant deferred tax assets associated with Pluto, and if weren’t paying and we wouldn’t book that asset. Again, as exactly when, it depends on the assumptions.

Like Mark, it's Peter. As you know, we do book some of the expiration assets last year. So the investment asset is sitting there. The expiration asset is out of the back. So some of these conversations we’re having around accelerating production and so forth, if that brings forth the economic [indiscernible], then that's tremendous, and we've got plenty of PRR2 [ph] reserve there. With respect to the conversations government, it's been really clear. You've got to look at total tax notes, simply PRR2, and whatever you do, don’t confuse PRR2, which is a profits based tax with the management of tax [indiscernible] by individual taxpayers. And so there's two buckets here. PRR2, profits based tax is a delivering for both sides. It's meant to be a balanced tax. And then secondly the way the taxpayers optimize their tax is that's something between government and the taxpayer. Don’t bring that as an industry issue. And people choose different paths and have different options in that space and can defend themselves where the other will justify the structures and would sign as a very simple structure and that's the choice that we've made. We've been very clear to government retrospectively. We'll bring [indiscernible] risk in this country. And that the only advantage we have is certainty of law. And a very low sovereign risk. We don't have a cost advantage from the cost of people that we used in the facilities. We have remote developments that by themselves a challenge. So we're not close to labor markets and so forth. So the biggest advantage that we actually have at solvent risk and cost of our capital and anything that government does to bring that into question is a real negative broadly across the industry. So I can say we've made this case very strongly. I've made it very strongly personally to the prime minister and the treasurer, and we're working very hard to make sure industry presents the single face on this one.

Your next question comes from the line of -- from JP Morgan. Please ask your question.

Hi guys. Just a question. It seems that acquisitions in 2016 and can I confirm if Woodside is still in the market for acquisitions you previously highlighted and Woodside's sweet spot of some $1 billion someone liquids rich acquisition. Is it still on the agenda?

Look we certainly will continue to look at building our portfolio. But the real target area is going to be around existing assets. So we'll be focused on things that deliver near to medium term value growth rather than things that are out there in the future. We've actually over some very long dated -- what we think are long dated opportunities in the areas that we operate, notwithstanding we like assets, but it wasn't bringing near term value for us in a capital constrained environment, which we're operating, which is to think that was the best deployment of capital. But certainly, for things that we can tie into existing facilities or grow equity in different areas, where we already have existing equities there are things that are very attractive to us, and we'll continue to go after them, including in our exploration programs. So you could expect there are explorers are looking to build out their existing acreage positions around the areas that we are already in, that we'd like -- that we think are the most perspective.

Great thanks. And then just a follow up question. Can I just confirm if plan [indiscernible], Browse and Scarborough is back on the shore for processing?

[indiscernible] in the Joint venture -- in those joint ventures is still floating. What we're saying is we're going to work really hard to ensure that our existing investments utilized to the maximum. And so we're going to work hard to pull together the most compelling case for those joint ventures to run our assets through Pluto end or North West Shelf. But within the joint ventures, I can't speak on behalf of the joint ventures. I can only speak on behalf of Woodside. Within the Joint Ventures the base case is still fighting which is fine. We know what the challenge is, but we have the opportunity and as well as I mentioned previously, we're the only Company that's in all four assets. So if anybody can pull it together, we can.

There are no further questions at this time. I would like to hand the call back to speakers. Please continue.

Thanks everybody for joining us this morning. I know it's been a long conference call, but I hope we have been able to provide some insight, not only to the 2016 results, which are as I mentioned in the opening, I think were tremendous given these conditions that we were operating in. But just as importantly the platform that we have now built from 2017 onwards. We've worked hard to develop the optionality that we have in our portfolio. You can see we'll continue to work hard and squeeze our existing asset base. And we're focused on maximizing that margins at this point of time, keeping our balance sheet in good shape, so we can pursue anything that we need to. Of course, we have focus on returns to our shareholders. Our payout ratio remains at around 80%, and of course our fully paid dividends are being enjoyed by the market place and we see. That continues to be in our business plan until changes that in the future -- changes that view. So again, thanks very much for your support and timing. Dan and I will be speaking to a number of you over the next coming days. Lawrie is not joining me on this trip. He tells me he's sad at that, got a smile on his face. So again I would just like to reiterate our thanks for Lawrie and again thanks to you as well.