BHP Advances Trinidad Gas Drilling
Australia-based miner BHP Billiton has provided an update on its offshore Trinidad gas appraisal.
In its full year results on August 21, BHP said that following its LeClerc gas discovery there, it began Phase 2 of its deepwater exploration drilling campaign to further assess the commercial potential of the Magellan play: the Victoria-1 exploration well was spud June 12 and encountered gas; it plans to drill the Concepcion prospect to further test the Magellan play by June 2019.
Elsewhere in Trinidad, it spud the Bongos-1 exploration well July 20 but it had mechanical difficulties; Bongos-2 was spud July 22 and found hydrocarbons with drilling still underway.
BHP said group profit attributable to shareholders in full year 2018 (which ended June 30) was down by 37% year on year to $3.705bn. After year-end on July 27, it announced the sale of its onshore US gas and oil business to BP for $10.8bn, proceeds from which will be returned to BHP shareholders once completed, said CEO Andrew Mackenzie. (All figures here and below are in US dollars.) Production from its discontinued US onshore operations in the 12-months to June 30 2018 was 72,000 barrels of oil equivalent/day, down 10% year on year.
BHP’s net petroleum production in the same period from continuing operations was 120,000 boe/d, down 6% year on year. Its guidance for the year to next June is 113-118,000 boe/d, down 6% to 2%. Average gas price realised in January-June 2018 was $3.71/’000 ft3, up 7% - but included US gas at $2.77, down 7%. It plans $750mn of petroleum exploration/appraisal capex in the year to June 2019.
Average LNG sales price in January-June 2018 was $8.65/’000 ft3, up 17%. BHP reduced its stake in the Scarborough LNG project in Australia late 2016 but retains an interest in that Woodside-operated project. BHP said that Scarborough LNG processing options are "being progressed" by the operator. BHP also retains a 16.7% in the Northwest Shelf gas and LNG venture in Australia.
BHP also improved revenues from its Algeria mainly oil operations were $234mn in the year ending June 2018, up from $212mn in the prior year, on higher oil prices.
Revenues were higher in Trinidad too, but the group reported the impact from "a revaluation of embedded derivatives in Trinidad and Tobago gas contract" to be a loss of US$153mn in 12-months to June 2018, compared to a prior year loss on such derivatives of $37mn.