MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) said work is underway to exit its U.S. onshore oil-and-gas assets, after it sold a small portion of its Hawkville shale acreage in Texas in the recent quarter.
As expected, the Australian resources company increased the number of drill rigs operating in the U.S. in a quarter where onshore volumes continued to decline and overall petroleum production weakened on a year earlier.
Continue Reading Below
It was a mixed quarter across BHP's suite of commodities, though it stuck with production and cost guidance for the full year and said it remained on track to deliver 7% volume growth. Copper output in the three months through September increased, metallurgical coal production was steady, but output of iron ore and energy coal were lower year-over-year.
The production numbers come a day ahead of BHP's annual meeting of shareholders in London, the first that will be led by Ken MacKenzie since he succeeded Jac Nasser as chairman last month.
Mr. MacKenzie, who had been a director at BHP for about a year and previously led packaging company Amcor Ltd., took control of the board under the shadow of activist investor Elliott Management Corp.'s calls for sweeping changes, including an exit from U.S. shale activities and a collapsing of its dual U.K.-Australia listed structure around a primary listing in Sydney. After months of campaigning by the New York hedge fund, BHP in August said it had determined its U.S. onshore oil-and-gas acreage weren't core and would in time be sold.
Overall petroleum production fell 8% on year to 50 million barrels of oil equivalent, with U.S. onshore volumes down 16% to 17 million barrels, due in part to what the company said was natural field decline as well as the impact of Hurricane Harvey in the Gulf of Mexico. For the shale operation, the decline was partially offset by additional wells in the Black Hawk, Permian and Haynesville basins, it said.
BHP said it increased the number of onshore rigs in operation to nine over the recent quarter, adding two rigs in the Permian region and one each in the Black Hawk and Haynesville acreage.
The company has said it had more recently pivoted its focus back to conventional oil and gas operations, including production in the U.S. Gulf of Mexico and off Australia.
Among the company's other commodities, it said production of copper rose 14% on-year to 404,000 metric tons as volumes increased at the Escondida operation in Chile's Atacama Desert.
Output of metallurgical coal used in steelmaking was flat at 11 million tons, while iron-ore production slipped 3% to 56 million tons partly due to planned maintenance and lower stockpiles after a fire in June at an Australian mine. Production of thermal coal used by power stations was down 2% on-year at 7 million tons, which the company said reflected a strong performance at its New South Wales division in eastern Australia offset by the impact of poor weather at its Cerrejon operation in Colombia.
In August, BHP recorded a net profit of US$5.89 billion in the 12 months through June, a sharp improvement from a year-earlier loss of US$6.39 billion when BHP absorbed an impairment hit on its onshore U.S. oil-and-gas business and a charge for the fatal 2015 dam failure at the Samarco iron-ore operation in Brazil.
Write to Robb M. Stewart at firstname.lastname@example.org
(END) Dow Jones Newswires
October 17, 2017 18:16 ET (22:16 GMT)