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BHP Billiton Limited (BHP)

  • Tue, Jan. 13, 6:55 PM
    • MarketWatch's Philip Van Doorn spotlights U.S. drillers and oilfield services companies with efficiency advantages that could help them weather the bear market in crude oil.
    • A key step in the fracking process to extract oil from shale is pumping proppant into a well to open cracks from which oil and gas can flow, but the cost of proppant varies widely; companies with the lowest proppant cost will have the best shot of turning a profit from shale extraction operations during a prolonged period of low oil prices, Van Doorn writes.
    • The Rockies formation is considered the most efficient, with a proppant cost of $8.88/bbl during the first 90 days of production; 54% of WPX Energy’s (NYSE:WPX) non-conventional oil wells are in the Rockies.
    • 83% of Noble Energy’s (NYSE:NBL) non-conventional wells are located in the Niobrara formation, which has a low proppant cost of $15.41/bbl.
    • Overall, Hess (NYSE:HES) is calculated to boast the best proppant efficiency, with an average cost of $3.58/bbl for the first 90 days of production, followed by BHP Billiton (NYSE:BHP) with an average cost or $9.14, and Whiting Petroleum (NYSE:WLL) with an average proppant cost of $11.08/bbl.
  • Mon, Jan. 12, 2:56 PM
    • Apache (NYSE:APA) appears to have gone cold on the $3B sale of its remaining West Australian gas and oil assets as oil prices plunge and potential buyers struggle, The Australian reports.
    • Sales talks with potential buyers are said to have been held up in the wake of sliding prices and high Western Australia gas prices amid falling international oil prices and U.S. gas prices that could make a deal look less appealing.
    • At the same time, last month’s $2.75B sale of its Wheatstone LNG stake in Australia and in the yet-to-be approved Kitimat venture in British Columbia may have eased the pressure from activist shareholders who were pushing APA to focus on the U.S.
    • Among potential buyers, Santos (OTCPK:STOSF) is APA’s partner in some Australian fields but is now in conservation mode following the oil price slide, Origin Energy (OTC:OGFGF) is facing a downgrade of its credit rating if oil prices fall and will not want to weaken its balance sheet, and even BHP - APA’s partner in the Macedon gas plant - is facing challenges maintaining its A-grade credit rating.
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  • Dec. 31, 2014, 7:35 AM
    • "The major factor that undercut ore prices in 2014 was the Australian-led supply surge," says Morgan Stanley's Tom Price. "In terms of price downside, the worst is probably over."
    • A late-year rally has prices down "only" about 50% for the year.
    • The bear market occurred as low-cost supplies from the like of BHP Billiton (BHP, BBL) and Rio Tinto (NYSE:RIO) came online just as demand from China began to cool, and the market shifted to surplus in the middle of the year. Goldman Sachs sees the excess widening to roughly 300M tons by 2017 as past investments from the miners continue to lift supplies.
    • Behind Morgan Stanley's quasi-bullishness is the idea of the price decline pushing high-cost producers to the sideline, a thought echoed by VALE CEO Murilo Ferreira last month.
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  • Dec. 31, 2014, 2:48 AM
    • The U.S. Bureau of Industry and Security said it will allow companies to sell oil condensate that has been processed through a basic distillation tower, giving them a green light for export without violating a four decade old ban.
    • The agency also published a list of answers to common questions about crude exports, providing guidelines for the first time on an area that has been blanketed in confusion, although many are saying there is still a lot of room for interpretation.
    • Previously: U.S. gives silent okay to condensate exports (Dec. 30 2014)
    • Related tickers: PXD, EPD, BHP, PSX, KMI, ETP, RGP, CVX
  • Dec. 30, 2014, 8:13 AM
    • The U.S. Commerce Department is telling some oil companies that they should consider exporting condensate without formal permission, Reuters reports.
    • Officials familiar with the law said the agency's discussions did not represent a change in policy since self-classification is allowed under U.S. export controls.
    • Despite the policy, Pioneer Natural Resources (NYSE:PXD) and Enterprise Products Partners (NYSE:EPD) obtained explicit permission from the agency to export in June, while last month BHP Billiton (NYSE:BHP) became the first company to announce that it would export condensate without authorization from the government.
    • Related tickers: PSX, KMI, ETP, RGP, CVX
  • Dec. 22, 2014, 6:15 PM
    • Global iron ore producers fell today after Australia's Department of Industry slashed its iron ore price estimate by a third due to surging output, which has outpaced Chinese demand and growth, creating a surplus.
    • Iron ore prices will average $63/metric ton, vs. $94/ton forecast in September and this year's expected average of ~$88, according to the government's latest quarterly report.
    • Ore with 62% content delivered to Qingdao, China, fell 1.8% to $67.90/metric ton, the lowest price since June 2009 and extending this year’s rout to 50%.
    • Not everyone is quite so gloomy: Prices appear oversold and there’s potential for a relief rally in H2 2015, Australia & New Zealand Banking says, forecast iron ore to average $80/ton, noting that any recovery will be driven by supply cuts, including high-cost mines in China, where the industry is losing at current prices.
    • During today's trading: BHP -2%, RIO -1.8%, VALE -0.6%, CLF -7.9%.
  • Dec. 22, 2014, 10:45 AM
    • Natural gas prices fall 9.5% to near two-year lows at $3.133/mmBtu, in the biggest one-day percentage loss since February and the lowest intraday price since January 2013, on mild weather forecasts and inventory that is above year-ago levels.
    • Prices are now down more than 15% in three straight losing sessions and are 30% lower than the six-month high closing price of $4.489/mmBtu it hit just a month ago.
    • Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago and encouraging traders to sell based on the belief that supply is relatively healthy.
    • Gas producers are among the biggest early decliners: XOM -1.1%, CHK -7.3%, APC -2.6%, SWN -6%, DVN -2.2%, COP -2.3%, BP -1.5%, COG -4%, BHP -1.9%, CVX -1.3%, ECA -5.1%, EQT -4.3%, RDS.A -1.7%, UPL -12%, WPX -6.9%, EOG -1%, OXY -1.1%, RRC -6.1%, APA -2.3%, AR -3.2%, CNX -3%, QEP -4.8%, LINE -4.9%, NBL -1.6%, SM -2.6%, XEC -4.2%, PXD -2.9%, NFX -5.1%.
  • Dec. 15, 2014, 5:57 PM
    • BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) are amassing vast copper holdings in a push to capture a greater chunk of the $140B world market, apparently aiming to squeeze out high-cost producers just as they did in the global iron ore business, Reuters reports.
    • Separately and in joint ventures, Rio and BHP intend to mine millions of additional tons of copper, despite seeing an oversupplied market for the next few years.
    • While Rio and BHP likely would not hold the same degree of dominance over copper that they do in iron ore - Codelco, Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Freeport McMoran (NYSE:FCX) will remain bigger producers for the foreseeable future - their influence on global supply would be enhanced.
    • The drive in copper also could give BHP and Rio an advantage over rival Vale (NYSE:VALE), whose exposure to copper is less than half that of BHP and Rio.
  • Dec. 15, 2014, 2:58 PM
    • BHP Billiton (BHP -2.6%) is downgraded to Underperform from Sector Perform at RBC Capital, which says BHP's cash flow metrics look weaker than its peers over the next two years.
    • The firm questions the timing of BHP's South32 spinoff of its aluminum, nickel, silver and coal divisions amidst potential structural change in oil and iron ore, seeing it as a case of "good idea, bad timing."
    • BHP needs $16B-$20B in operating cash flow just to cover its capex and dividend requirements, which would be problematic if commodity prices continue to slide, RBC says.
  • Dec. 15, 2014, 11:42 AM
    • Unionized workers at the Antamina copper and zinc mine in Peru end a strike that began last Wednesday over demands for better labor conditions and a greater profit share, and will restart work today, according to the mine owners.
    • The mine is controlled by BHP Billiton (NYSE:BHP) and Glencore Xstrata (OTCPK:GLCNF, OTCPK:GLNCY), which each own 33.75% stakes, while Teck Resources (NYSE:TCK) has a 22.5% interest and Mitsubishi owns 10%.
    • Antamina produced about one-third of Peru’s copper production in 2013; the country is the world’s third-biggest producer of copper.
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  • Dec. 15, 2014, 1:55 AM
    • Rio Tinto (NYSE:RIO) and BHP Billiton (NYSE:BHP) are looking to replicate their iron ore strategy in the copper business, squeezing out high-cost producers by injecting more of the red metal into an oversupplied market.
    • Separately and in joint ventures, Rio and BHP intend to mine millions of additional tonnes of copper, confident in the coming years that copper will be in short supply.
    • Copper producers: OTCPK:GLNCY, FCX, TCK, SCCO
  • Dec. 13, 2014, 8:25 AM
    • BHP Billiton (NYSE:BHP) iron ore chief Jimmy Wilson says the days of $100/metric ton iron ore likely are over amid a supply glut and weak Chinese demand.
    • Iron ore fetched ~$135/metric ton a year ago, but it is now below $70 as output from global giants such as BHP, Rio Tinto (NYSE:RIO) and Vale (NYSE:VALE) increases, hurting higher-cost producers.
    • "It's hard to see the sort of significant bump that we've seen come from China happen again," Wilson says.
    • BHP general manager for iron ore marketing Alan Chirgwin says the company expects China's growth in consumption of steel - in which iron ore is a crucial component - to slow to 0.5%-1.5% next year.
  • Dec. 11, 2014, 12:16 PM
    • BHP Billiton (BHP -0.2%) says it will seek to raise the profile of fertilizers among its suite of products as it hunts for resources to tap longer-term growth in China.
    • “Potash can be our fifth pillar” as an area of strategic growth in China, executive Mike Henry says, adding to BHP's four key markets of iron ore, oil and natural gas, copper and coal.
    • Henry says BHP continues to evaluate partners for its giant Jansen potash development in western Canada, including potential Chinese candidates, but offers few clues on the project's development schedule.
  • Dec. 9, 2014, 8:29 AM
    • Mining companies sink in premarket trading as J.P. Morgan lowers its iron ore outlook through 2017, predicting prices will extend declines as growth in low-cost supply from the world’s largest producers outstrips demand.
    • Iron ore will average $67/metric ton next year, 24% less than previously forecast, $65 in 2016, down 23%, and $69/ton in 2017, down 16%, the firm says; iron ore has averaged $98.82/ton YTD but recently slumped to a five-year low $68.49.
    • "The only way the oversupply can be averted is if the low-cost producers cut back on their growth targets," which is unlikely, JPM says, as "feedback from recent site visits to the Pilbara suggests there is currently no consideration for slowing capacity growth from either Rio Tinto or BHP Billiton."
    • BHP -2.1%, RIO -1.2%, VALE -1.2% premarket.
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  • Dec. 9, 2014, 4:58 AM
    • BHP Billiton (NYSE:BHP) has sold its first cargo of processed condensate from the U.S., testing the waters of exporting the minimally processed oil without a permit.
    • The producer sold a 650K-barrel cargo to U.S. firm Koch for delivery during the first half of January at a premium of about $2 a barrel to WTI.
    • Previously: BHP to export condensate without permit (Nov. 05 2014)
    • BHP -2.2% premarket
  • Dec. 8, 2014, 3:51 AM
    • BHP Billiton (NYSE:BHP) will call the planned spin-off of its aluminium, nickel, silver and coal divisions South32 - based on the thirty-second parallel south line of latitude which links its two regional centers in Australia and South Africa.
    • Documentation of the demerger will likely be released in March 2015, with a shareholder vote taking place in May.
    • BHP's new $16B entity will have a primary listing on the Australian Securities Exchange, with additional listings in London and Johannesburg.
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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.