By David Winning

SYDNEY--Woodside Petroleum Ltd. forecast an impairment charge of US$3.92 billion against the value of its oil and gas assets, as it grapples with a more subdued outlook to energy prices and the coronavirus pandemic.

Woodside said a US$2.76 billion charge would be taken against oil and gas properties from Australia to Senegal. The largest hit, at nearly US$1 billion after tax, relates to the Wheatstone liquefied natural gas project offshore Australia and reflects the company's reduced assumptions for oil prices.

A further US$1.16 billion impairment charge will be taken against four exploration and evaluation assets, including the Sunrise natural-gas project offshore East Timor and the Kitimat LNG project in Canada.

Woodside said it also expects its first-half results in August to include an onerous contract provision of US$447 million for the Corpus Christi LNG sale-and-purchase agreement.

With the price of Brent crude--the global benchmark--down around 35% so far this year, oil and gas producers are scrambling to review assets that aren't worth as much as they previously thought. One of the biggest responses came from BP PLC last month: the U.K. company said it is writing down as much as US$17.5 billion of its assets and might leave some of its oil and gas in the ground.

Woodside said it assumed Brent crude will average US$35 a barrel in the second half of this year when calculating the value of its assets, and that the price of oil will recover to US$44/bbl in 2021. Brent ended Monday trading at US$42.72/bbl.

Still, Chief Executive Peter Coleman said the low oil-price environment would likely force companies to consider reshaping their portfolios.

Woodside said its gearing--a measure of a company's debt relative to equity--is expected to be around 19% at the end of June, well within its target range of 15%-35%. That means the Perth, Australia-based company has significant firepower to pursue acquisitions.

"The unique confluence of events that has unfolded through 2020 will challenge all participants in the global energy sector and we expect to see adjustment of capital allocation priorities by other asset owners as the cycle plays out," Mr. Coleman said.

"Woodside's disciplined approach to financial management gives us options to pursue inorganic growth opportunities as and when they emerge," he added.

Woodside didn't signal any particular opportunities but analysts have speculated that the company could be interested in Chevron Corp.'s 16.67% stake in the North West Shelf liquefied natural gas project that the U.S. producer has put up for sale. Woodside is the operator of the North West Shelf facility. 



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