BHP Billiton Steady on Petroleum, Copper, Others -- Commodity Comment

FeaturesDow Jones Newswires

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...

Continue Reading Below

"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)

Continue Reading Below