Goode lobbied for real incentives to stimulate the exploration industry, not the narrowly focused initiatives government has rolled out, while on the floor almost 40 million shares voted against an incentive plan for the company’s top 25 executives.
Loud applause greeted one shareholder who described the plan as “disgusting to the point of obscenity.” Goode said the plan had been in development for two years and was aimed at aligning bonuses to individual and company performance.
Analysts suggested that with the number of shares being voted in protest against the incentive scheme, there was a high probability there was institutional opposition to the proposal, but no institutionals would comment on their positions.
Goode responded by saying that while he didn’t know why society paid nurses and doctors less than finance and business types, he said he did know that unless Woodside was not competitive with the market, it would not be able to secure executive talent.
Goode also said government needed to expand the limited incentives it had offered the exploration industry in recent times to avoid a looming indigenous supply shortfall.
“It is now well known that without a succession of major discoveries Australian oil production by 2020 is likely to be less than half of what it is today while demand is likely to exceed production at least three-fold,” he said.
Goode claimed that on some projections Australia's annual petroleum import bill in 2010 could be higher by A$24 billion a year and A$30 billion higher by 2015.
“To illustrate, explorers were drilling more than 250 wells a year in Australia in the mid-1980s [but]last year less than half that number was drilled, despite real oil prices that were comparable to the mid-1980s," he said.
“While we commend the Government for adjusting these settings in last year’s budget by introducing a 150% deduction for exploration in frontier areas, the measures are limited to just 20% of new acreage releases, and are of limited value to companies that do not have a tax-paying production facility in Australia.”
In exploration news, Woodside yesterday said the Ocean Patriot drilling rig had reached a total depth of 1875 metres in the Halladale-1 DW-2 well in the Otway Basin, and was running logs over a gross 21 metre gas column.
Preliminary analysis of well data acquired to date in Halladale-1 DW-2 indicates that the well has intersected gas over a gross interval of approximately 21 metres true vertical depth (23 metres measured depth along hole) within interbedded sandstones and shales of the Waarre Formation.
The Halladale-1 DW-2 well is the second exploration well drilled from this location after being sidetracked and deviated from the original Halladale-1 well bore north to a down flank location.
The previous well, Halladale-1 DW-1 (Location Black Watch), was drilled deviated to the south and evaluated the Black Watch Prospect, which was also found to be gas bearing in the Waarre Formation.
Origin Energy Resources Limited is operator of the VIC/P37(v) permit (37.5%), with drilling operations managed by Woodside Energy Ltd (62.5%).
