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BHP Billiton Limited (BHP)

  • Yesterday, 3:34 PM
    • Rio Tinto (RIO -1.2%) CEO Sam Walsh rejects as “hare brained” a request by a rival miner for the industry to stop the slide in iron ore prices by collectively capping output.
    • Mining execs say any attempt to agree a cap on production would leave companies exposed to lawsuits and fines for anti-competitive pricing in multiple jurisdictions, as well as complaints and potential litigation from customers.
    • The arguments show the extent to which miners have been hurt by the drop in prices, although the largest producers such as BHP, Vale (NYSE:VALE) and Rio, continue to insist they can withstand the slump.
    • Andrew Forrest, CEO of Fortescue Metals (OTCPK:FSUMF) - the world's no. 4 iron ore supplier which earlier this month pulled out of a proposed debt refinancing because of unfavorable market conditions - suggested this week that a production cap by the big iron ore miners would help prices.
  • Thu, Mar. 19, 11:46 AM
    • Western Australia Premier Colin Barnett calls out BHP Billiton (BHP -1%) and Rio Tinto (RIO -1.5%) on the company's decisions to run their iron ore mines in the state’s Pilbara region at full bore and depressing iron ore prices.
    • "This has been one of the dumbest corporate plays I think I’ve ever seen,” Barnett says.
    • The premier - essentially the two miners’ landlord - has been forced to scramble to deal with the hole in the state’s revenues by a collapse in the price of iron ore to a six-year low of ~$55/ton from $180 back in 2011.
  • Wed, Mar. 18, 2:57 PM
    • Fortescue Metals (OTCPK:FSUMF -7.2%) earlier today pulled a proposed $2.5B debt sale, highlighting an iron ore market in deepening distress as prices closed at six-year lows.
    • "Rather than lowering the interest cost, we understand the funding cost for the proposed $2.5B secured note was likely to be 8.5%-9%; hence why the offering was pulled," according to Citigroup analysts.
    • Fortescue, the world's fourth largest iron ore miner, made the decision to pull the bond issue as iron ore prices fell by 5% to US$54.50/ton, driven down by a rapid expansion in supply by the miner as well as rivals BHP Billiton (BHP +1.2%), Rio Tinto (RIO -0.2%) and Vale (VALE -0.6%); stock prices had been much lower before today's Fed announcement.
    • Analysts expect iron ore prices to fall even further as BHP and Rio press ahead with mine expansions in coming years and China’s economic growth slows.
    • Also: CLF -3.9%.
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  • Tue, Mar. 17, 7:40 PM
    • Crude oil production at three major U.S. shale oil fields - the Eagle Ford in south Texas, the Bakken in North Dakota, and the Niobrara in Colorado and adjacent states - is projected to fall this month for the first time in six years, the Energy Information Administration says.
    • Net production from the three fields is expected to drop by a combined 24K bbl/day, but overall losses likely will be masked by production gains in the Permian Basin in west Texas and other regions.
    • It is one of the first signs that idling hundreds of drilling rigs and billions of dollars in corporate cutbacks are starting to affect the U.S. oil patch, but it also shows that drilling technology and techniques have advanced to the point that productivity gains may be negligible in some shale plays.
    • Top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    • Top Niobrara producers: NBL, APC, ECA, CHK, EOG, WPX
  • Tue, Mar. 17, 7:12 PM
    • Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
    • COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
    • All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
    • Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
    • The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
  • Mon, Mar. 16, 5:58 PM
    • BHP Billiton (NYSE:BHP) outlines its plan to spin off the new company called South32, saying shareholders will vote May 6 on a proposal to offer investors one share in the separate company for every BHP share.
    • BHP says South32 will distribute at least 40% of its underlying earnings as dividends to shareholders, and reiterates it will not re-base its own dividend lower following the de-merger.
    • BHP last year announced its intention to spin off nickel, aluminum and other properties that would allow it to focus on fewer resource operations in what would be one of the biggest de-mergers in mining history.
  • Wed, Mar. 11, 12:41 PM
    • Cliffs Natural Resources (CLF -7%) CEO Lourenco Goncalves says global iron ore miners should rethink plans to aggressively ramp up supply of the commodity, believing the consequences for Australia could be especially severe.
    • Iron ore prices have been cut roughly in half to US$58/metric ton over the past year because of increased exports from Australia's Pilbara region, and Goncalves says a further fall to $30 could lead to "Australia going out of business as a country, because [iron ore] is the most important commodity."
    • Low-cost Australian exporters BHP Billiton (BHP -1.1%) and Rio Tinto (RIO -0.6%) say that if they don't raise production then someone else will, but Goncalves calls the strategy "self-destruction."
  • Tue, Mar. 10, 11:59 AM
    • Top execs at the world's two largest mining companies - BHP Billiton (BHP -3.7%) and Rio Tinto (RIO -2.3%) - say they believe China's hunger for iron ore is not ready to fade, even as the price hit new lows after the country lowered its economic growth forecast to ~7% for 2015 vs. 7.4% growth last year.
    • BHP iron ore president Jimmy Wilson says iron ore demand from China's manufacturing sector had been running above BHP's expectations in recent months, echoing comments from Rio's iron ore chief Andrew Harding, who expressed optimism China's government can maneuver the economy into a new stage of growth.
    • Harding says China's steel production only needs to rise 1%/year - in line with its estimated growth last year - for the country to reach 1B tons of crude steel output around 2030.
    • Earlier: BHP's Wilson stands by iron ore expansion amid glut
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  • Tue, Mar. 10, 8:28 AM
    • BHP Billiton (NYSE:BHP) iron ore boss Jimmy Wilson is out in defense of the company's strategy of boosting iron ore output at a time of falling prices and global oversupply.
    • "If we pull back our volume, that volume will be filled by other companies... We [would] be penalizing, in essence, our shareholders," Wilson argues, signaling no change of course from BHP even as prices drop.
    • "The big guys are saying: ‘We’ve got huge margins, so we’ll keep pumping out iron ore because we’re still making money’,” says a top economist at Westpac Banking.
    • Iron ore prices have cut in half over the past year as rising supply from new and expanded mines outpaces demand from steelmakers.
    • Premarket: BHP -3%, VALE -2.7%, RIO -1.4%.
  • Fri, Mar. 6, 8:25 AM
    • Iron ore tumbles to a six-year low after China lowered its economic forecast, renewing concerns about its appetite for the steel-making material at a time when supplies are already outpacing demand.
    • Steel demand growth in China - which buys three in every five tons of iron ore traded by sea - last year already was at its slowest in more than a decade.
    • Australian iron ore miners have been laying off workers and cutting costs as they cope with lower prices, but they are not expected to curb production, particularly as a weaker Australian dollar helps cushion them from the impact of falling prices.
    • RIO -1.4%, BHP -0.6% premarket; also VALE -0.8%.
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  • Tue, Feb. 24, 4:58 PM
    • BHP Billiton (NYSE:BHP) racked up several positives in its H1 results, but the company’s valuations and challenges stemming from its U.S. onshore petroleum and potash operations, as well as the South32 de-merger mean Rio Tinto (NYSE:RIO) may be the better stock to play a possible recovery in commodities prices, according to a Barron's profile.
    • From a valuation standpoint, BHP trades at 15.4x projected earnings and 2.1x book value, while Rio trades at 13.3x projected earnings and 2.1x book, Barron's Isabella Zhong writes.
    • Rio's iron ore cash cost of $19.50/metric ton is even leaner than BHP’s $20.35, and Rio has a more focused business, with a concentration on iron ore, aluminum and copper., and - unlike BHP - no exposure to oil.
  • Tue, Feb. 24, 12:28 PM
    • BHP Billiton (BHP +5.5%) is rallying after H1 results turned out better than expected even as profits plunged against a backdrop of plummeting commodity prices.
    • Despite the 47% fall in H1 profit, BHP still will raise its interim dividend by 5% to $0.62/share and pledges to maintain or increase its dividend even after a proposed de-merger later this year which will see BHP hive off some unwanted assets into the separate South32 company that analysts estimate will be worth ~$15B.
    • BHP's costs have fallen faster than expected: Capital spending dropped 23% in H1, and BHP now will spend less this fiscal year and next than it had expected, cutting its original spending plans by 15% to $12.6B (£8.2B) for FY 2015 and to $10.8B in 2016.
    • BHP’s aluminum, manganese and nickel business - mostly part of South32 - was the only division to improve its Y/Y operating profit, while prices for iron ore, oil and copper - the flagship commodities of the streamlined BHP - have slumped, so BHP's next task is to convince investors that it makes sense to be less diversified.
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  • Tue, Feb. 24, 10:14 AM
    • Oil production in the British section of the North Sea continued to decline in 2014 amid rising costs, high taxes and low oil prices, according to a report from an industry lobbying group which wants the U.K. government to cut taxes and streamline the complex regime for the oil and gas sector.
    • British North Sea production in 2014 fell 1.1% Y/Y to 1.42M boe/day, the report says, down ~70% since the area's peak in 1999.
    • The report notes that oil companies drilled only 14 exploration wells last year in the British part of the North Sea, vs. ~70 exploration wells drilled in the nearby Norwegian sector, where the government offers more generous tax incentives.
    • Among the North Sea's major producers: BP, RDS.A, RDS.B, COP, E, BHP, TOT, CVX, CEO, OTCPK:BRGXF, OTCQX:BRGYY, OTCQX:REPYY, OTCPK:REPYF
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  • Mon, Feb. 23, 5:22 PM
    • BHP Billiton (NYSE:BHP) reports a 47% Y/Y drop in net profit to US$4.27B for the six months through December, down from a $8.11B profit a year earlier but ahead of analyst consensus for $3.59B.
    • BHP's underlying profit for the six months, which excludes non-cash charges against assets including some oil fields in North Louisiana, was down 31% Y/Y at $5.35B; however, BHP is raising its interim dividend 5% to US$0.62/share.
    • BHP says it spent $6.4B on finding and developing new deposits and in expanding existing ones, but that was 23% lower than the $8.3B it spent in the same six-month period a year earlier.
    • Also says it is focusing its cap spending more on improving efficiency and reducing costs at its existing projects rather than developing new ones.
  • Tue, Feb. 17, 7:59 AM
    • BHP Billiton (NYSE:BHP) agrees to sell its Pakistan gas business to a local firm for an undisclosed sum.
    • BHP, operator of the Zamzama gas field and processing plants, has been looking to sell its 38.5% percent stake for some time, as it works to simplify its petroleum business to focus on the U.S., Australia and Trinidad and Tobago.
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  • Fri, Feb. 13, 7:59 AM
    • BHP Billiton (NYSE:BHP) says copper production from its Olympic Dam mine in Australia will be cut by 60K-70K metric tons this year, or more than a third of  targeted output levels, due to repair and maintenance work.
    • BHP says the Svedala mill, one of three at Olympic Dam, will be out of action for roughly six months after damage from an electrical failure in the milling process was found on Jan. 28; full production was expected to resume by the end of September.
    • In January, BHP said it expects Olympic Dam to yield ~180K tons of copper in FY 2015, with maintenance work scheduled for September.
    • The hit to copper production represents up to 3.9% of current guidance for the metal in BHP's financial year through June, with corresponding reduction in the production of gold and uranium at the mine.
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Company Description
BHP Billiton Ltd is a natural resources company. The Company is engaged in the producing commodities, including iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminium, manganese, uranium, nickel and silver.