BHP Billiton Steady on Petroleum, Copper, Others -- Commodity Comment
January 18 2018 - 8:26AM
Dow Jones News
BHP Billiton posted a half-year operational review Thursday, in
which it maintained its full-year guidance on petroleum, copper,
iron ore and energy coal. Here are remarks on metals from the
company's earnings report:
On metallurgical coal...
"Production guidance reduced to between 41 [million tons] and 43
million tons as a result of challenging roof conditions at
Broadmeadow, which are expected to continue through the March 2018
quarter, and geotechnical issues triggered by wet weather impacts
at Blackwater. Unit cost guidance is also expected to be negatively
impacted..."
On onshore U.S. operations...
"Our operated rig count remained at nine during the December
2017 quarter but is expected to fall as we tailor plans to maximize
value in the exit process. We continue to progress a number of
alternatives to divest our onshore U.S. assets for value."
On underlying EBIT...
"December 2017 half-year is expected to include impairment
charges, predominantly related to conveyors at Escondida, in a
range of US$250 million to US$350 million."
On petroleum...
"Total petroleum production for the December 2017 half year
decreased by 7% to 99 million barrels of oil equivalent [MMboe].
Guidance for the 2018 financial year remains unchanged at between
180 and 190 MMboe... [Onshore U.S. production down 12% year-on-year
in December] Decrease due to the impact of Hurricane Harvey and
Hurricane Nate in the Gulf of Mexico, and natural field decline
across the portfolio..."
On onshore U.S. development activity...
"In the Permian, sub-surface trials have confirmed first year
production improvements associated with larger completions. We
reduced our rig count from three to two [in December 2017
quarter]... In the Eagle Ford, we increased our rig count from two
to three in the December 2017 quarter to test the Austin Chalk
horizon and trial larger completions in Hawkville. We anticipate a
return to two rigs during the March 2018 quarter... In Haynesville,
we recently incorporated larger completions and have been operating
new wells with larger chokes, both of which have improved
results..."
On copper...
"Escondida copper production for the December 2017 half year
increased by 29% to 583,000 tons, supported by the start-up of the
Los Colorados Extension [LCE] project... LCE successfully ramped
up... enabling utilization of the three concentrators...Escondida
and Union Ndeg2 of Supervisors and Staff signed a new Collective
Agreement, valid from 1 October 2017, which has a duration of 36
months."
On iron ore ...
"At Western Australia, record production at Jimblebar and Mining
Area C was offset by the impact of lower opening stockpile levels
following the fire at the Mt. Whaleback screening plant in June
2017, and planned maintenance in the previous quarter. Volumes
increased by 11% from the September 2017 quarter with a record
annualized rate of 284 metric tons achieved for the December 2017
quarter."
On metallurgical coal...
"Metallurgical coal production for the December 2017 half year
decreased by 4% to 20 metric tons. Guidance for the 2018 financial
year has been reduced to between 41 [metric tons] and 43 metric
tons and reflects lower volumes now expected at Broadmeadow and
Blackwater."
On nickel...
"Nickel West production for the December 2017 half year
increased by 11% to 45,000 tons of nickel primarily due to improved
performance at the Kalgoorlie smelter. Nickel production guidance
for the 2018 financial year remains unchanged and is expected to be
broadly in line with the 2017 financial year."
Write to David Hodari at david.hodari@wsj.com
(END) Dow Jones Newswires
January 18, 2018 09:11 ET (14:11 GMT)
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