WPL Woodside Petroleum Limited

SYDNEY—Woodside Petroleum Ltd. said it would write down the value of its assets by between US$1 billion and US$1.2 billion, as the global rout in crude-oil prices worsens.

Still, the Perth-based company said it could produce more oil and natural gas this year than in 2015 as it didn't plan to carry out major maintenance on its Pluto gas-export project in northern Australia and it seeks to implement new measures to make the flagship facility more productive.

Woodside—Australia's second-largest oil and gas producer by volume, after BHP Billiton Ltd.—forecast output of between 86 million and 93 million barrels of oil equivalent in the year through December. That compares to the 92.2 million barrels of oil equivalent pumped in 2015, which was broadly at the midpoint of guidance issued last month.

"We continue to relentlessly focus on delivering the fundamentals of our business and are now seeing the benefits of our productivity programs flow through to our results," Chief Executive Peter Coleman said. "The recent significant fall in oil and gas prices has highlighted the quality of our low cost production and approach to balance sheet risk management."

Woodside said it would look to reduce spending on existing projects and exploration to around US$1.96 billion this year, from US$2.35 billion in 2015. On Wednesday, U.S. crude futures tumbled below US$27 a barrel, underscoring the intensifying fears about the pace of global growth and fueling a deepening rout of the financial markets in the new year.

Woodside has been among the most aggressive globally in seeking opportunities to expand, despite its share price tumbling to its lowest level since mid-2005 on concerns that a global glut of crude oil will take years to clear.

In September, Woodside made an all-stock takeover offer for Oil Search Ltd. that valued the Papua New Guinea-based company at 11.64 billion Australian dollars (US$8 billion). It later walked away from a deal after Oil Search's directors rejected the offer as too low.

For Woodside, a combination with Oil Search would have increased its bet on natural gas and the continuing growth in Asia's appetite for cleaner-burning fuels at a time of low prices.

The proposed deal was also viewed by some analysts as an answer to Woodside's struggle to grow its reserves and production levels after repeated delays to an investment decision on the massive Browse LNG project off Australia's coast. Two years ago, the company also abandoned a planned US$2.5 billion investment in the Leviathan natural-gas discovery off Israel's coast.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

January 21, 2016 03:15 ET (08:15 GMT)

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