Pyrenees Western Australia Focusing on value over volume Tim Cutt President, Petroleum and Potash 10 December 2013
Key themes Committed to ongoing improvement in our HSEC performance A large, high quality resource base concentrated in Australia and the US Low risk brownfield investment is maximising the value of our Conventional business Our…
Safety is our priority Total Recordable Injury Frequency (TRIF, 12 month moving average) 8 Petroleum TRIF Shale TRIF Fatality 6 4 2 0 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 BHP…
Our HSEC focus areas Health Minimise exposure to silica during hydraulic fracturing operations in our Shale business Safety Leverage systems and technology to manage material risks Environment Manage water usage and…
An experienced Petroleum management team President Petroleum and Potash Tim Cutt President Exploration Asset President Shale Asset President Conventional David Rainey Rod Skaufel Steve Pastor VP Finance VP Strategy and VP…
A large, high quality resource portfolio We have more than doubled our resource BHP Billiton petroleum resource base and delivered 100% reserve (billion boe) replacement over the past five years 10 US Australia Our business is…
Australia and the US remain our core regions FY14 BHP Billiton capital and exploration expenditure BHP Billiton Petroleum Shale Petroleum Australia other Gulf of Mexico Exploration other United Kingdom Onshore US Algeria…
Australian assets deliver strong, stable cash flow North West Shelf Pyrenees / Macedon Bass Strait Petroleum Underlying EBITDA Stybarrow (US billion) 10 Petroleum Australia 5 Thebe 0 Jupiter FY09 FY10 FY11 FY12 FY13…
US assets will underpin substantial growth Shenzi Atlantis Mad Dog Neptune Onshore US Oklahoma liquids focused area Fayetteville gas focused area Arkansas BHP Billiton acreage Mississippi Onshore US New Mexico Haynesville…
Conventional investment profile Brownfield Exploration Appraisal Engineering Execution Operations projects Conventional life cycle driven by few but Representative investment profile significant front end investment decisions (US…
Shale investment profile Mapping and Area specific Exploration Appraisal Full development Leasing tests Shale life cycle driven by continuous Representative investment profile investment decisions and optimisation (US million)…
A clear focus on value over volume We will prioritise the highest return Greenfield project IRR investment opportunity (%, IRR) 30 investment in our shale liquids BHP Billiton acreage (tight oil) generates strong near term focus…
FY14 production guidance maintained On track to produce 250 MMboe in FY14 Strong growth in Shale liquids production (Petroleum production, MMboe) 75% increase in shale liquids production 300 stable Conventional volumes as Macedon…
Leveraging the infrastructure of our Conventional business Capital expenditure of US1.5 billion per FY14 Conventional production outlook annum is expected to maintain Conventional (MMboe) volumes for three to five years 140 high…
Development options must compete for capital We own significant contingent resources Scarborough / Thebe Western Australia within our core areas Scarborough (ExxonMobil operated, Thebe Jupiter BHP Billiton share 50%) is an 8 tcf1…
Shale development plan will be continually optimised for value We are prioritising investment in the liquids BHP Billiton Onshore US shale plays rich, high return shale assets pursuing accelerated development in the prolific Black…
Positioned to deliver substantial growth in free cash flow Our Shale business must compete for Onshore US production scenario capital within the broader BHP Billiton (kboe/d) portfolio 600 annual budgets will be subject to 450…
Extending our high return liquids profile Efforts underway to expand our Permian land position in our core focus area 100,000 net acres1 in this focus area acquiring additional acreage in highly prospective areas with a view to…
We have flexibility to adjust our plans Development of our existing liquids acreage Onshore US capital expenditure scenario dominates our investment program (US billion) 5 infrastructure component will decline as build out in the…
Our productivity agenda continues to deliver strong results Repetitive, manufacturing nature of shale is BHP Billiton Black Hawk drilling cost performance1 ideally suited to our productivity agenda (index, Q1 FY13 = 100, US million)…
Strong outlook with growth prioritised for value Petroleum production scenario1 (MMboe) 400 Conventional Onshore US 300 200 100 0 FY09 FY10 FY11 FY12 FY13 FY14e FY15e FY16e FY17e FY18e 1. Forward projections are based…
Key themes Committed to ongoing improvement in our HSEC performance A large, high quality resource base concentrated in Australia and the US Low risk brownfield investment is maximising the value of our Conventional business Our…
A major earnings contributor David Powell Vice President, Finance 10 December 2013
Petroleum is a pillar of BHP Billiton Strong financial performance over the last five BHP Billiton Underlying EBIT2 years reflects the quality of our Petroleum assets (US billion) (margin, %) 40 80 18% of total BHP Billiton…
Product mix a key driver of Onshore US revenue Decisive response to market conditions Onshore US liquids contribution underpins significant growth in Onshore US (% of total Onshore US production) (% of total revenue) liquids…
Seeking to improve our low cost position Low cost conventional operations underpin Petroleum costs exceptional margins (US/boe) 20 Our decision to prioritise shale liquids 15 development has increased margins albeit with an…
Timing of reserve additions impacts depreciation Conventional unit depreciation remains Depreciation highly competitive (US/boe) 25 minor variations reflect project start-ups 20 and timing of resource additions 15 Our successful…
A compelling long term outlook for Onshore US Onshore US margin scenario1 (%) 80 EBITDA margin EBIT margin 60 40 20 0 (20) FY13 FY14e FY15e FY16e FY17e FY18e 1. Forward projections are based on current…
Understanding the US fiscal regime The fiscal regime in the US is aimed at encouraging development of oil and gas resources US tax code allows for immediate deduction of intangible drilling and development costs (IDC) deferring…
A high return investment program Petroleum offers some of the highest return Capital and exploration expenditure investment opportunities for the Group (US billion) 25 Capital and exploration expenditure of US6.2 billion is planned…
Trinidad Maximising the value of our Conventional business Steve Pastor Asset President, Conventional 10 December 2013
Key themes Operating excellence and highly profitable assets provide a strong foundation for our Petroleum business Low-risk, high return infill drilling and brownfield expansions will extend our production profile Demonstrated…
A strong foundation for our Petroleum business Conventional production outlook Petroleum Underlying EBITDA (FY14, BHP Billiton share) (US billion) 10 Petroleum Conventional International other 5 46 kboe/d 0 FY09 FY10 FY11 FY12…
Highly profitable Conventional business Australia and the Gulf of Mexico are our core Production volume regions with valuable infrastructure positions (Conventional, MMboe) (%) 200 80 Conventional volumes have remained steady 150…
Maximising value through operational excellence We are an industry leader in deepwater Average drill time per 1,000 ft drilling capability and operational uptime (Deepwater Gulf of Mexico, subsalt, days) 8 our drilling times are well…
Strong track record of project delivery Demonstrated ability to deliver our projects Shenzi Neptune on budget and schedule Six major operated projects completed on schedule and budget in the last six years two deepwater Tension…
Shenzi our premier operated facility High quality reservoir over 400 feet thick in the Shenzi field map Gulf of Mexico Excellent operating performance, 95% uptime North since start-up High return infill drilling campaign continues…
Atlantis release of high margin latent capacity World class Gulf of Mexico oil asset with Atlantis field map substantial latent capacity Excellent results from wells drilled in North area, initial rate from recent well 30 kboe/d…
Mad Dog release of high margin latent capacity Mad Dog is among the largest oil fields in the Mad Dog field map Gulf of Mexico Mad Dog Phase 1 rig lost during Hurricane Ike in North 2008 has been replaced and is now operational West…
WA operated valuable infrastructure position Significant resource and valuable infrastructure Western Australia operated assets position underpins our operated assets in this area Macedon gas project now online, expected to…
Bass Strait our largest Conventional asset Delivered first production more than 40 years ago Bass Strait assets Project execution challenges at Turrum and Kipper resulted in revisions to original budget and schedule Longford gas…
North West Shelf a major Asian LNG supplier NWS has five LNG trains with capacity of 16 mtpa NWS assets Major projects will extend the production profile North Rankin 2 online October 2013 on schedule and budget Greater Western…
International assets Trinidad has significant potential Trinidad has the potential to become a third core Production from International operations region for our Petroleum business (MMboe, BHP Billiton share) 40 plans to extend…
All investments must compete for capital Scarborough 8 tcf1 (100% basis) Scarborough / Thebe Western Australia BHP Billiton 50%, ExxonMobil operator good quality reservoir, lean gas Thebe Jupiter delineated field with five…
Further opportunities in the Gulf of Mexico Mad Dog Phase 2 has potential to deliver Gulf of Mexico assets high rates of return we are assessing development concepts with the operator Stampede (formerly Knotty Head) is 30 miles…
We will simplify the portfolio for value Six assets contributed 90% of Petroleum Contribution from the core regions Underlying EBIT in FY13 (Underlying EBIT,% of Conventional total1) 100 Recent divestments highlight our ability to…
Key themes Operating excellence and highly profitable assets provide a strong foundation for our Petroleum business Low-risk, high return infill drilling and brownfield expansions will extend our production profile Demonstrated…
Asset name here A disciplined focus on Tier 1 oil opportunities David Rainey President, Exploration 10 December 2013
Key themes We are targeting large, high quality oil opportunities, primarily within our existing operated footprint Exploration for conventional and shale resources require a deep understanding of regional geology and petroleum…
Focused conventional exploration program Tier 1 exploration criteria World class source rock Big reservoir system Large traps Gulf of Mexico Progress best Miocene opportunities Acceptable fiscal terms Evaluate other Gulf of…
We have built a material position in Trinidad and Tobago We have an established operational presence Leads in Trinidad and Tobago with our shallow water BHP Billiton blocks Angostura asset The deepwater is largely untested and has…
Extending our high return shale liquids profile Our priority is to delineate the liquid sweet spots in the Gulf Coast and Permian Basins to guide acreage optimisation Pearsall exploration well drilled in October 2013 targeting…
Key themes We are targeting large, high quality oil opportunities, primarily within our existing operated footprint Exploration for conventional and shale resources require a deep understanding of regional geology and petroleum…
Eagle Ford Texas Extending our high return, shale liquids profile Rod Skaufel Asset President, Shale 10 December 2013
Key themes Large, high quality resource position across multiple fields We have successfully refocused drilling activity on our liquids rich acreage Progressing development in the liquids rich Permian We are evaluating options to…
Significant presence in premier US shale plays We hold 1.5 million net acres1 across four BHP Billiton Onshore US shale plays highly productive US shale plays and three US states Black Hawk (Eagle Ford) condensate rich Hawkville…
A high quality shale resource portfolio Onshore US resources by product Onshore US resources by category (as at 30 June 2013, net, billion boe) (as at 30 June 2013, net, billion boe) 3.0 3.0 liquids Contingent Resources (2C) gas…
Dry gas acreage is largely Held by Production In the Haynesville and Fayetteville, leases Example: multiple leases within a 640 acre unit held comprise regulatory unit size of 640 acres, once production established within terms of the…
Hawkville has continuous drilling obligations Hawkville is characterised by irregular leases Example1: Large, irregular leases with continuous, with boundaries often defined by the large time dependent drilling obligations for…
Rigs re-focused to liquids development Onshore US operated rigs (% rig split) (average number of gross operated drill rigs) 100 50 80 40 60 30 40 20 20 10 0 0 Jan 12 Mar 12 Jun 12 Jan 13 Mar 13…
Delivering strong growth in high value liquids production Onshore US production by product Onshore US production by area (MMboe) (MMboe) 30 30 liquids Black Hawk Hawkville gas Permian Haynesville Fayetteville 20 20 10 10 0…
We are among the largest producers in the Eagle Ford Eagle Ford is now the largest producing Eagle Ford production by operator field within our Petroleum portfolio (net, kboe/d) 125 currently producing in excess of BHP Billiton1 100…
We hold a premier position in the Eagle Ford Black Hawk (58k net acres1) in the BHP Billiton Eagle Ford acreage position heart of the condensate window condensate window Hawkville (250k net acres1) a mix BHP Billiton acreage of…
Black Hawk heart of the condensate window 148 net producing wells as at 30 June 2013 Black Hawk acreage position condensate window Average production of 60 kboe/d BHP Billiton acreage (BHP Billiton share) at approximately 80% 40…
Hawkville mix of condensate and gas with NGL 235 net producing wells as at 30 June 2013 Hawkville acreage position condensate window Average production of 66 kboe/d BHP Billiton acreage (BHP Billiton share) at approximately 45%…
Haynesville strong returns at current prices Premier acreage position in one of the most Haynesville acreage by Recoverable Resource productive shale gas plays in the US BHP Billiton acreage Single well recoverable resource (bcf)…
Fayetteville preserving value Extensively drilled with low geologic risk Fayetteville map with FY13 non-operated drilling 959 net producing wells as at 30 June 2013 Average dry gas production of 68 kboe/d (BHP Billiton share)…
Permian we have defined a highly prospective focus area BHP Billiton acreage in the Permian basin Divestment area Focus area Under evaluation Divestment area BHP Billiton Investor briefing: Petroleum, December 2013…
Permian unique multiple horizon potential Large liquid bearing column creates the potential for multiple economically productive horizons A vertical well program followed by targeted horizontal wells has been used to appraise the…
Permian targeting a 100 kboe/d development Well results support planned 100 kboe/d Production rate recent wells in focus area development within the focus area with (boe/d, 100% basis) approximately 60% liquids 1,800 Process of…
Shale capital allocation optimised for value 1. For every operated well, we calculate the optimum timing to deliver maximum value, utilising forward price projections and cost learning curves 2. We test the sensitivity of value to…
Timing investment for maximum value Capital allocation methodology informs rig Illustration of value sensitivity to spud date program decisions to capture maximum (% of maximum NPV delivered relative to spud date) value 100…
Video the drilling and completions process BHP Billiton Investor briefing: Petroleum, December 2013 Slide 79
Committed to sustainable development Be the safest company in industry Protect the land where we operate Safeguard and manage water resources Minimise air emissions Be a good neighbour to our communities BHP Billiton…
Manufacturing process, ideally suited for productivity improvement Stake Build Drill Complete Connect Development Clearing and Well design Inventory Equipment plans and site construction Support services management procurement…
Productivity opportunities have been identified and actioned Repetitive, manufacturing nature of shale is Multiple opportunities to deliver material value ideally suited to our productivity agenda (Black Hawk, % NPV improvement) 20…
Utilising benchmarking and repetition of best practice to drive performance Total well costs include site preparation and Components of Black Hawk well cost well site facilities (US million) 12 25% of our well costs are time…
Targeting a significant reduction in drilling costs Significant cost improvement has been BHP Billiton Black Hawk drilling cost performance1 realised (US million) 8 We have recontracted key services 6 including fracturing,…
Increased recoveries provide the greatest upside We are targeting an improvement in ultimate Successfully trialling high temperature frac fluids recovery from completion optimisation and (% improvement in cumulative production) well…
Targeting a reduction in spud to sales time We are targeting a reduction in the number Average spud to sales (on a four well pad) of days from spud to sales in the Black (days) Hawk while continuing to focus on safety 200…
Key themes Large, high quality resource position across multiple fields We have successfully refocused drilling activity on our liquids rich acreage Progressing development in the liquids rich Permian We are evaluating options to…
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