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October 2016 Corporate Presentation – BHP Billiton Limited

BHP Billiton Limited · Oct 4, 2016 · 92 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. October 2016 Corporate Presentation – BHP Billiton Limited – slide 1
    BHP Billiton Petroleum An exciting outlook for our Petroleum business Steve Pastor President Operations, Petroleum
  2. October 2016 Corporate Presentation – BHP Billiton Limited – slide 2
    Statement of Petroleum Resources Petroleum Resources The estimates of Petroleum Reserves and Contingent Resources contained in this presentation are based on, and fairly represent, information and supporting documentation prepared under…
  3. October 2016 Corporate Presentation – BHP Billiton Limited – slide 3
    An exciting outlook for our Petroleum business Petroleum is core to BHP Billiton Value accretive production potential over the next decade1 (BHP Billiton production, MMboe) strong financial and operating performance 300 oil and US…
  4. October 2016 Corporate Presentation – BHP Billiton Limited – slide 4
    Experienced leadership driving value and returns Deep experience across leadership team average industry and functional experience of over 25 years President Operations Petroleum Steve Pastor operating experience across six…
  5. October 2016 Corporate Presentation – BHP Billiton Limited – slide 5
    Petroleum is core to BHP Billiton Significant contributor over the last five years Strong and stable margins (Underlying EBITDA margin2, %) over 20% of Group production1 100 over 30% of Group Underlying EBITDA 75 average…
  6. October 2016 Corporate Presentation – BHP Billiton Limited – slide 6
    Global energy needs are rising Emerging economies will drive energy demand Primary energy demand by commodity1,2,3 (Btoe4) global population to increase by 1.5 billion and GDP to double 16 Thousands by 2035 world must pursue…
  7. October 2016 Corporate Presentation – BHP Billiton Limited – slide 7
    Attractive crude oil fundamentals Oil market is rebalancing Oil mass balance: global (MMbbl/d) (Supply/Demand, MMbbl/d) robust demand growth underpinned by developing countries 2 98 supply growth slowing as capital investment is…
  8. October 2016 Corporate Presentation – BHP Billiton Limited – slide 8
    Robust gas demand growth US market expected to rebalance at the end of this year Gas mass balance: North America (bcf/d) (Supply/Demand, bcf/d) mild winter, industry-wide productivity gains and resilient 2 100 supply resulted in…
  9. October 2016 Corporate Presentation – BHP Billiton Limited – slide 9
    Australia and the US are our core regions Our high-quality resource base underpins our major producer position in core regions (BHP Billiton resource, FY16, Bboe)1 (BHP Billiton production, Mboe/d, CY15, net) 4 300 2nd 6th 9th 4th Rank2…
  10. October 2016 Corporate Presentation – BHP Billiton Limited – slide 10
    Operating safely and sustainably is our priority The health and safety of our people is paramount Lost-Time Injury Frequency (LTIF) (number of recordable injuries per million hours worked1) record and reputation as one of the safest…
  11. October 2016 Corporate Presentation – BHP Billiton Limited – slide 11
    Onshore US well placed as prices recover Operating in the heart of some of the best shale plays Black Hawk drilling cost performance (US million/well, 100% basis) large resource base in Eagle Ford 6 significant potential in Permian…
  12. October 2016 Corporate Presentation – BHP Billiton Limited – slide 12
    Stable volumes and high margins in Conventional Our Conventional business is low cost and high-margin High margins in Conventional2 (Conventional production, MMboe) (EBITDA margin, %) unit cash costs expected to be US10/boe over the…
  13. October 2016 Corporate Presentation – BHP Billiton Limited – slide 13
    Targeting Tier 1 liquids growth opportunities Organic growth is the priority Significant potential in oil exploration over the next three years (value1, BHP Billiton share) targeting frontier basins with Tier 1 potential program…
  14. October 2016 Corporate Presentation – BHP Billiton Limited – slide 14
    An exciting outlook for our Petroleum business Petroleum is core to BHP Billiton Value accretive production potential over the next decade1 (BHP Billiton production, MMboe) strong financial and operating performance 300 oil and US…
  15. October 2016 Corporate Presentation – BHP Billiton Limited – slide 15
  16. October 2016 Corporate Presentation – BHP Billiton Limited – slide 16
    Petroleum Marketing Rebalancing markets, positive long-term fundamentals Michiel Hovers Vice President Marketing, Petroleum
  17. October 2016 Corporate Presentation – BHP Billiton Limited – slide 17
    Rebalancing markets, positive long-term fundamentals Oil market is rebalancing near-term demand growth of more than 1 MMbbl/d per annum inventory drawdown as supply growth slows considerably Long-term positive outlook for oil…
  18. October 2016 Corporate Presentation – BHP Billiton Limited – slide 18
    Global oil market is rebalancing Global demand expected to surpass global supply in 2017, Total US crude oil production and rig profile inventories to decline (MMbbl/d) (Oil rigs) 11 1,750 demand growth in 2017 expected to be 1.2…
  19. October 2016 Corporate Presentation – BHP Billiton Limited – slide 19
    Positive long-term oil demand fundamentals Robust demand growth underpinned by developing countries Long-term liquids demand forecast (MMbbl/d) China and India expected to account for half of global demand 80 growth over the next…
  20. October 2016 Corporate Presentation – BHP Billiton Limited – slide 20
    30 MMbbl/d of new supply required by 2025 Compelling supply opportunity Potential new oil supply1 by 2025 (US/bbl, real Jan 2016) natural field decline and demand growth drive need for new 100 supply US Shale Non-core new…
  21. October 2016 Corporate Presentation – BHP Billiton Limited – slide 21
    North American gas: strong demand, abundant supply Strong demand growth underpinned by multiple sectors North America gas demand (bcf/d) total North American demand CAGR of 3% to 2025 120 gas is a reliable, economic and a low…
  22. October 2016 Corporate Presentation – BHP Billiton Limited – slide 22
    Hedging price and input costs accelerates Haynesville gas volumes Gas and iron ore production profiles1 comparison Henry Hub monthly futures and spot pricing (Production as % of peak rate) (US/MMbtu, nominal) 100 8 80 6 60 4…
  23. October 2016 Corporate Presentation – BHP Billiton Limited – slide 23
    Rebalancing markets, positive long-term fundamentals Oil market is rebalancing near-term demand growth of more than 1 MMbbl/d per annum inventory drawdown as supply growth slows considerably Long-term positive outlook for oil…
  24. October 2016 Corporate Presentation – BHP Billiton Limited – slide 24
  25. October 2016 Corporate Presentation – BHP Billiton Limited – slide 25
    Petroleum Financial Performance Driving productivity and capital discipline Michelle Turner Vice President Finance, Petroleum
  26. October 2016 Corporate Presentation – BHP Billiton Limited – slide 26
    Driving productivity and capital discipline Petroleum supports cash flow stability average Underlying EBITDA margin of 66% over the last five years Conventional provides stable volumes and cash flow Onshore US provides flexibility to…
  27. October 2016 Corporate Presentation – BHP Billiton Limited – slide 27
    Leading EBITDA margins Consistently strong margins over the last five years Peer leading EBITDA margins1 (Underlying EBITDA margin, %) contributed US40 billion Underlying EBITDA 80 peer leading Underlying EBITDA margin of 66% 60…
  28. October 2016 Corporate Presentation – BHP Billiton Limited – slide 28
    Depreciation US18/boe in FY17 Conventional unit depreciation increases US1/boe in FY17 Petroleum depreciation rates1 reflecting project completions and timing of resource (US/boe) additions 30 Onshore US depreciation increases…
  29. October 2016 Corporate Presentation – BHP Billiton Limited – slide 29
    Driving capital and operating productivity Productivity underpinned efficiency in FY16 Annual supply savings Petroleum headcount (US million) (count) controllable cash costs fell US677 million down 28% 400 4,000 working capital…
  30. October 2016 Corporate Presentation – BHP Billiton Limited – slide 30
    Capital allocation provides discipline and transparency Globalised finance function oversees capital allocation Capital and exploration expenditure1 (US billion) co-located finance teams support operations 5 competition for capital…
  31. October 2016 Corporate Presentation – BHP Billiton Limited – slide 31
    Driving productivity and capital discipline Petroleum supports cash flow stability average Underlying EBITDA margin of 66% over the last five years Conventional provides stable volumes and cash flow Onshore US provides flexibility to…
  32. October 2016 Corporate Presentation – BHP Billiton Limited – slide 32
  33. October 2016 Corporate Presentation – BHP Billiton Limited – slide 33
    Onshore US Capturing full resource value Alex Archila Asset President, Shale
  34. October 2016 Corporate Presentation – BHP Billiton Limited – slide 34
    Statement of Petroleum Resources Petroleum Resources The estimates of Petroleum Reserves and Contingent Resources contained in this presentation are based on, and fairly represent, information and supporting documentation prepared under…
  35. October 2016 Corporate Presentation – BHP Billiton Limited – slide 35
    Capturing full resource value Large, quality resource supports returns and optionality 3 Bboe 2P1 reserves including 500 MMbbls of oil up to 1,200 net liquids-rich wells deliver at least 15% IRR at US50/bbl, contingent upon trials in…
  36. October 2016 Corporate Presentation – BHP Billiton Limited – slide 36
    Approximately 850k net acres across four large fields Eagle Ford Outline of BHP Billiton Onshore US acreage by play largest component of current production Fayetteville liquids-rich acreage in Black Hawk New Mexico Oklahoma…
  37. October 2016 Corporate Presentation – BHP Billiton Limited – slide 37
    Responding to market while improving capital efficiency Production growth over FY12 to FY15 (14% CAGR) demonstrates Onshore US production1 Onshore US capital1 rapid growth potential with new investment (MMboe, BHP Billiton share) (US…
  38. October 2016 Corporate Presentation – BHP Billiton Limited – slide 38
    3 Bboe 2P reserves including 500 MMbbls of oil Onshore US reserves and resources1, 2, 3 Onshore US resources by product1, 2, 3 (as at 30 June 2016, Bboe, BHP Billiton share) (as at 30 June 2016, Bboe, BHP Billiton share) 2.5 2.5 2.0…
  39. October 2016 Corporate Presentation – BHP Billiton Limited – slide 39
    Continuing to deliver material well cost savings Well costs down 40% over the past two years with further Reduction in Black Hawk well costs1 reductions in FY17 (US million, 100% basis) 10 Large portion of drilling cost reductions…
  40. October 2016 Corporate Presentation – BHP Billiton Limited – slide 40
    Operating productivity delivering significant savings 30% reduction in field operating costs relative to FY15 Reduction in upstream field operating costs (US million, BHP Billiton share) embedded tools and practices originally…
  41. October 2016 Corporate Presentation – BHP Billiton Limited – slide 41
    Superior well performance in core liquids-rich fields Condensate production in the first 12 months outperforms peers in Black Hawk well performance relative to peers1, 2, 3 both Black Hawk and Permian (cumulative production, gross…
  42. October 2016 Corporate Presentation – BHP Billiton Limited – slide 42
    Black Hawk: expanding inventory Current production of 55 Mboe/d (net) Black Hawk field acreage De-risking future development areas through ongoing trials ongoing Lower Eagle Ford (LEF) trials in Southwest and upcoming trials in…
  43. October 2016 Corporate Presentation – BHP Billiton Limited – slide 43
    Hawkville: encouraging results from recent trials Hawkville acreage Current production of 30 Mboe/d (net) Oil Evaluating encouraging results from new completions designs trialled by both BHP Billiton and other operators 230 net…
  44. October 2016 Corporate Presentation – BHP Billiton Limited – slide 44
    Permian: clear line of sight to development Current production of 30 Mboe/d (net) Permian core acreage and producing wells one rig focused on 100 remaining obligation wells (gross) recent acreage swaps to enable longer laterals New…
  45. October 2016 Corporate Presentation – BHP Billiton Limited – slide 45
    Haynesville: recommenced high-return drilling program Current production of 50 Mboe/d (net) Haynesville acreage and core development area Commenced drilling 16 well (gross) program in October with 30% returns1 production hedged at…
  46. October 2016 Corporate Presentation – BHP Billiton Limited – slide 46
    Fayetteville: low technical risk, long-term option Current production of 45 Mboe/d (net) Fayetteville acreage Extensively drilled with low geological risk Investment limited to minimal OBO1 elections Working with partners to…
  47. October 2016 Corporate Presentation – BHP Billiton Limited – slide 47
    Large and improving investable inventory Attractive investment options at relatively low prices Liquids-rich portfolio delivering 15% returns at flat price bands1, 2, 3 (net working interest wells, US/bbl) 1,200 net liquids-rich wells…
  48. October 2016 Corporate Presentation – BHP Billiton Limited – slide 48
    Price scenarios A range of possible price scenarios derived from analysts forecasts. West Texas Intermediate crude oil consensus prices Henry Hub natural gas consensus prices (US/bbl, nominal) (US/MMbtu, nominal) 100 4.50 Scenario 2…
  49. October 2016 Corporate Presentation – BHP Billiton Limited – slide 49
    Operational capability to respond to market conditions Scenario 11, 2, 3 Scenario 21, 2, 3 Scenario 31, 2, 3 Mid activity based on consensus average prices High activity based on consensus high prices Low activity based on consensus low…
  50. October 2016 Corporate Presentation – BHP Billiton Limited – slide 50
    Ability to quickly adjust production response Potential response in a range of price scenarios Onshore US potential production response1, 2 (MMboe, BHP Billiton share) annual average base decline of 15% in FY18-22 250 volumes…
  51. October 2016 Corporate Presentation – BHP Billiton Limited – slide 51
    Maximising value and cash flow Potential to remain cash flow positive under the three price Onshore US potential pre-tax free cash flow1, 2 scenarios outlined (US billion, BHP Billiton share, nominal) 4 Flexibility remains to pivot…
  52. October 2016 Corporate Presentation – BHP Billiton Limited – slide 52
    Capturing full resource value Large, quality resource supports returns and optionality 3 Bboe 2P1 reserves including 500 MMbbls of oil up to 1,200 net liquids-rich wells deliver at least 15% IRR at US50/bbl, contingent upon trials in…
  53. October 2016 Corporate Presentation – BHP Billiton Limited – slide 53
    Appendices
  54. October 2016 Corporate Presentation – BHP Billiton Limited – slide 54
    Key well parameters: Black…
  55. October 2016 Corporate Presentation – BHP Billiton Limited – slide 55
    Key well parameters:…
  56. October 2016 Corporate Presentation – BHP Billiton Limited – slide 56
    Key well parameters:…
  57. October 2016 Corporate Presentation – BHP Billiton Limited – slide 57
    Key well parameters:…
  58. October 2016 Corporate Presentation – BHP Billiton Limited – slide 58
    Key well parameters:…
  59. October 2016 Corporate Presentation – BHP Billiton Limited – slide 59
  60. October 2016 Corporate Presentation – BHP Billiton Limited – slide 60
    Conventional Petroleum Extending the production runway Geraldine Slattery Asset President, Conventional
  61. October 2016 Corporate Presentation – BHP Billiton Limited – slide 61
    Statement of Petroleum Resources Petroleum Resources The estimates of Petroleum Reserves and Contingent Resources contained in this presentation are based on, and fairly represent, information and supporting documentation prepared under…
  62. October 2016 Corporate Presentation – BHP Billiton Limited – slide 62
    Extending the production runway Quality assets provide strong foundations low cost assets in stable political environments material player in chosen production heartlands strong free cash flow and returns through the price cycle…
  63. October 2016 Corporate Presentation – BHP Billiton Limited – slide 63
    Quality assets concentrated in Australia and GoM Conventional production outlook (FY17e, BHP Billiton share) 4th largest International other producer 3-4 MMboe in GoM North West Shelf 2nd largest 28-30 MMboe producer in Gulf…
  64. October 2016 Corporate Presentation – BHP Billiton Limited – slide 64
    1.3 Bboe 2P reserves including 500 MMbbls of oil Conventional reserves and resources1 Conventional reserves and resources by product1 (as at 30 June 2016, Bboe, BHP Billiton share) (as at 30 June 2016, Bboe, BHP Billiton share) 2.5…
  65. October 2016 Corporate Presentation – BHP Billiton Limited – slide 65
    Strong cash flow through the price cycle Attractive business at consensus prices over the next two years1: EBITDA1 EBITDA margin1 (US billion) (%) EBITDA margin of 70% 4 80 EBITDA of US3.5 billion per annum pre-tax free cash flow…
  66. October 2016 Corporate Presentation – BHP Billiton Limited – slide 66
    Industry leading operating and development capabilities Competitive with majors in deepwater drilling performance Operating uptime3 (%) Industry leading operating uptime and unit costs 100 Relentless focus on safety and productivity…
  67. October 2016 Corporate Presentation – BHP Billiton Limited – slide 67
    Brownfield and greenfield options to mitigate base decline Protecting margins from existing assets Conventional brownfield extension and greenfield growth1 (MMboe, net) maintain industry leading operating and development 150…
  68. October 2016 Corporate Presentation – BHP Billiton Limited – slide 68
    Rich portfolio of brownfield opportunities High-return brownfield projects in execution Brownfield growth capital1 (US million nominal, net, FY17-21 forecast) North West Shelf (NWS) GWF-A first production achieved Q4 1,600 CY15 with…
  69. October 2016 Corporate Presentation – BHP Billiton Limited – slide 69
    Greenfield developments provide longer term optionality Mad Dog Phase 2 Mad Dog 2 concept Capital estimate halved since 2013 field development plan optimisation standardisation design simplification capture market deflation Wet…
  70. October 2016 Corporate Presentation – BHP Billiton Limited – slide 70
    Accelerating development schedule post discovery Leveraging deepwater development capabilities Project development timeline Industry average positioned to capitalise on industry leading geological, BHPB 40 months 36 months Industry75…
  71. October 2016 Corporate Presentation – BHP Billiton Limited – slide 71
    Extending the production runway Quality assets provide strong foundations low cost assets in stable political environments material player in chosen production heartlands strong free cash flow and returns through the price cycle…
  72. October 2016 Corporate Presentation – BHP Billiton Limited – slide 72
  73. October 2016 Corporate Presentation – BHP Billiton Limited – slide 73
    Appendices
  74. October 2016 Corporate Presentation – BHP Billiton Limited – slide 74
    Australia non-operated focus areas Bass Strait Delivery of Longford Gas Conditioning Plant project in Q4 CY16 Progressing multiple investment opportunities West Barracouta Kipper Snapper Bass Strait NWS Tuna Targeted divestment…
  75. October 2016 Corporate Presentation – BHP Billiton Limited – slide 75
    Australia operated focus areas Pyrenees Pyrenees Phase 3 infill program executed in FY16 Phase 4 infill opportunities being assessed Supporting Exmouth basin seismic appraisal of the region Macedon Optimising value through…
  76. October 2016 Corporate Presentation – BHP Billiton Limited – slide 76
    Gulf of Mexico focus areas Atlantis Mad Dog Executing high-return multi- year infill program Mad Dog Executing high-value multi-year Spar A infill program Atlantis Shenzi Progressing Mad Dog 2 for FID Shenzi Operator BP Operator…
  77. October 2016 Corporate Presentation – BHP Billiton Limited – slide 77
    Rest of World assets Angostura Angostura Phase 3 completed Supporting exploration in the region Algeria Production Sharing Contract 10 Angostura Algeria (ROD) North Sea year extension signed Progressing government Operator BHP…
  78. October 2016 Corporate Presentation – BHP Billiton Limited – slide 78
    Petroleum Exploration Finding the next wave of conventional growth Niall McCormack Vice President Exploration, Petroleum Deepwater Invictus
  79. October 2016 Corporate Presentation – BHP Billiton Limited – slide 79
    Multi-billion barrel risked potential in current program Refocused portfolio on Tier 1 opportunities from 12 countries to three focus areas dominant acreage position in each basin and operatorship prospective multi-billion barrel…
  80. October 2016 Corporate Presentation – BHP Billiton Limited – slide 80
    2012: 12 countries, 5 continents, over 100 prospects Canada Onshore US Gulf of Mexico (US) India Vietnam Trinidad & Philippines Colombia Tobago Malaysia Brunei Australia South Africa Falkland Islands BHP Billiton…
  81. October 2016 Corporate Presentation – BHP Billiton Limited – slide 81
    2016: just 3 focus areas Gulf of Mexico (US) Mexico Trinidad & Tobago Barbados Australia Current exploration acreage position Potential exploration position BHP Billiton Investor Briefing, Exploration 5 October 2016 5
  82. October 2016 Corporate Presentation – BHP Billiton Limited – slide 82
    Focused footprint offers large prospective upside Upside is being de-risked by recent drilling successes Significant potential in oil exploration over the next three years (value1, BHP Billiton share) Gulf of Mexico (US) Mexico…
  83. October 2016 Corporate Presentation – BHP Billiton Limited – slide 83
    Testing three basins, six plays in three years Exploration program timed to minimise cost while maximising value FY16 FY17 FY18+ Reduced cycle time from access to drill through technology, right data, workflows Explore Shenzi…
  84. October 2016 Corporate Presentation – BHP Billiton Limited – slide 84
    Gulf of Mexico: Miocene success and Paleogene potential Green Canyon and Perdido US Gulf of Mexico Oil discoveries in central GoM Miocene A Houston leverages our understanding from Shenzi, Central Gulf of Mexico Mad Dog and…
  85. October 2016 Corporate Presentation – BHP Billiton Limited – slide 85
    Mexico: a natural extension of our Perdido position Mexican deep water bid round blocks Early entrant opportunity for potential Tier 1 Houston positioned to bid if prospects and fiscal terms are attractive significant potential (10…
  86. October 2016 Corporate Presentation – BHP Billiton Limited – slide 86
    Encouraging early results in the Caribbean Geoseismic images of LeClerc and Burrokeet Material operated Caribbean position Tier 1 potential in Trinidad A Southern Trinidad &Tobago large structures, world-class source rock (LeClerc)…
  87. October 2016 Corporate Presentation – BHP Billiton Limited – slide 87
    Maximising value through operational excellence Industry average 60 months1 36 months Industry average 75 months2 Explore Appraise Select Define Execute Produce Technology Right Data Work flows BHP Billiton 40 months 36 months…
  88. October 2016 Corporate Presentation – BHP Billiton Limited – slide 88
    Multi-billion barrel risked potential in current program Refocused portfolio on Tier 1 opportunities Significant risked future production potential to be tested by from 12 countries to three focus areas current drilling program1…
  89. October 2016 Corporate Presentation – BHP Billiton Limited – slide 89
  90. October 2016 Corporate Presentation – BHP Billiton Limited – slide 90
    BHP Billiton Petroleum Closing remarks Steve Pastor President Operations, Petroleum
  91. October 2016 Corporate Presentation – BHP Billiton Limited – slide 91
    Statement of Petroleum Resources Petroleum Resources The estimates of Petroleum Reserves and Contingent Resources contained in this presentation are based on, and fairly represent, information and supporting documentation prepared under…
  92. October 2016 Corporate Presentation – BHP Billiton Limited – slide 92
    An exciting outlook for our Petroleum business Petroleum is core to BHP Billiton Value accretive production potential over the next decade1 (BHP Billiton production, MMboe) strong financial and operating performance 300 oil and US…

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