BHP Billiton’s President Petroleum and Potash, Tim Cutt, has revealed that their US shale business is set to turn a profit for the company before interest and tax positive this financial year.
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According to the news release, BHP has strengthened its position in its core area in the Permian Basin and intends to go ahead with its plan to build 100,000 barrels of oil equivalent per day business by the end of the 2018 financial year.
“The well results to date are positive and repeatable and there is additional upside to the development program given our longer-term outlook for the field. The repetitive nature of shale is ideally suited to BHP Billiton’s productivity agenda and we have seen drilling times in the Black Hawk improve by 21 per cent in the last financial year,” revealed Mr Cutt at the Barclays CEO Energy-Power Conference in New York City last Tuesday.
“The application of technologies including restricted flows of initial production ensures we achieve the best recoveries while being cost effective.”
Mr Cutt also revealed the company plans to invest approximately US$4 billion per annum in its Onshore US business and expects it to be strongly EBIT positive in the 2015 financial year.
“Free cash flow is expected to be positive by the 2016 financial year and approach US$3 billion per annum by the end of the decade,” said Mr Cutt.
BHP has confirmed plans to deliver around 200 kboe/d of liquids by the 2017 financial year from the Eagle Ford and the Permian.
“In our Conventional business, high-return infill drilling and brownfield extensions will maintain stable volumes and largely offset natural field decline, while longer term we have attractive development options that are competing for capital within the Group,” said Mr Cutt.
“Our exploration program will continue to focus on large tier-one conventional oil opportunities. In Trinidad and Tobago, where we have our shallow water Angostura asset, we are excited about the potential of the deep-water and have established a significant ‘early-mover’ position.”
