Exploration & Production | Top Story | Quarterly / Earnings Reports | First Quarter (1Q) Update

BHP Continues Shift from Hawkville Field; Grows Production

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Following the successful divestment of Liverpool Bay, BHP Billiton's production guidance for the 2014 financial year has been rebased to 245 MMboe. The two per cent reduction to previous guidance also reflects lower gas and natural gas liquids production in the Hawkville area of the Eagle Ford, although planned well remediation activities have now been completed.

Total Onshore US production of approximately 107 MMboe is now anticipated for the 2014 financial year and primarily reflects a lower contribution from natural gas. The overall reduction in full-year guidance has been mitigated by an increased contribution from higher-margin crude and condensate, predominantly from our Gulf of Mexico operations.

Production in the Eagle Ford accelerated at the end of the March 2014 quarter and we continue to expect growth in Onshore US liquids production of approximately 75 per cent for the full year as a significant inventory of completed wells is brought online.

Natural gas – Natural gas production for the nine months ended March 2014 declined by five per cent to 624 bcf. The successful delivery of first gas from Macedon partially offset lower seasonal demand at Bass Strait and natural field decline at Haynesville, which reflected our decision to prioritise Onshore US development drilling in the liquids rich Black Hawk region of the Eagle Ford.

Onshore US drilling and development expenditure totalled US$3.4 billion in the nine months ended March 2014. As anticipated, the rate of expenditure reduced in the March 2014 quarter to US$1.0 billion, in-line with our planned annual investment program of approximately US$4.0 billion. Approximately 75 per cent of drilling activity occurred in the Eagle Ford, with the majority focused on our Black Hawk acreage.