BHP Billiton announces fourth quarter production figures

BHP Billiton has released its production figures for Q4 2012 with both its petroleum and metallurgical coal businesses meeting analyst’s forecasts – but thermal coal fell short after problems at the company’s New Mexico operations dragged volumes down by 7% on the previous quarter.

A recovery in production of metallurgical coal following the resolution of industrial disputes at its Queensland coal operations was offset by planned maintenance shutdowns and the closure of the Gregory opencast mine, leaving production down 1% on the previous quarter but in line with expectations. The company also noted that: “Queensland coal production was approaching full supply chain capacity. The associated increase in productivity, broader economies of scale and the closure of high cost capacity is expected to deliver a substantial reduction in unit costs in the second half of the 2013 financial year”.

Petroleum production in H2 2012 “underpinned full year guidance”, which remained unchanged at 240 million bbl of oil equivalent.

Petroleum

Petroleum production totaled 121 million bbl of oil equivalent during the half year to December 2012. Liquids volumes increased by 4% from Q3 and reflected continued growth in onshore US liquids production, development drilling at Shenzi (US) and a full quarter contribution from the Atlantis and Mad Dog facilities (both US). These results were partially offset by a seasonal reduction in Bass Strait (Australia) production and natural field decline at Pyrenees (Australia).

Record onshore US liquids production of 48,000 bbl/day during Q4 represented a 13% increase on the previous quarter. A focused drilling programme in the liquids-rich areas of the Eagle Ford and Permian is expected to drive strong growth in onshore US liquids production over the rest of the 2013 financial year.

Lower Q4 gas production reflected the seasonal reduction in demand for Bass Strait natural gas that followed a particularly strong Q3.

Metallurgical coal

Queensland Coal (Australia) sales increased by 30% from Q3. Production totaled 8.888 million for the quarter, 17.826 million t for the half year.

At Illawarra Coal (Australia), a longwall move at the Dendrobium mine commenced at the end of Q4. Illawarra Coal achieved record sales during the half year ending December 2012.

Thermal coal

A 7% increase in production in the half year to December 2012 compared to the previous year was underpinned by record production at New South Wales Energy Coal (Australia), which continued to benefit from the ramp up of the RX1 project. However, dragline outages at Navajo Coal and an unplanned shutdown at San Juan Coal (both US) contributed to a 7% decline in volumes from the previous quarter. Q4 production totaled 18,256 million t, 37,863 for the half year.

The New South Wales Energy Coal and BECSA (South Africa) product mix continued to evolve with an increase in the overall proportion of high ash coal sold to key growth markets during the December 2012 half year.

Written by Jonathan Rowland.

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