The mining, metals and petroleum company‘s[ds_preview] year production and unit cost guidance remains unchanged as it reports declines in production. BHP Billiton sees »early signs of markets rebalancing«.
Total petroleum production for the September 2016 quarter decreased by 15 % to 54.5 Million Barrels of Oil Equivalent (MMboe). Guidance for the 2017 financial year remains unchanged at between 200 and 210 MMboe, comprising Conventional volumes between 123 and 127 MMboe and Onshore US volumes between 77 and 83 MMboe. Crude oil, condensate and natural gas liquids production for the September 2016 quarter declined by 21 % to 24.2 MMboe. Onshore US liquids volumes decreased by 38 % to 8.3 MMboe. Conventional liquids volumes decreased by 8 % to 16.0 MMboe.
Natural gas production for the September 2016 quarter declined by 10 % to 182 billion cubic feet. The decline primarily reflects lower Onshore US gas volumes as a result of the decision to defer development activity for longer-term value and the successful divestment of our gas business in Pakistan on 31 December 2015. Onshore US development activity Onshore US drilling and development expenditure for the September 2016 quarter was US$ 108 million. The operated rig count declined from four to two during the September 2016 quarter.
Total copper production for the September 2016 quarter decreased by six per cent to 355 kt. Guidance for the 2017 financial year remains unchanged at 1.66 Mt, subject to the review of Olympic Dam copper production guidance. Total iron ore production for the September 2016 quarter was unchanged at 58 Mt on a BHP Billiton share basis, or 67 Mt on a 100 per cent basis. Guidance for the 2017 financial year remains unchanged at between 228 and 237 Mt on a BHP Billiton share basis, or between 265 and 275 Mt on a 100 per cent basis, with volumes weighted to the last three quarters of the year.
Metallurgical coal production for the September 2016 quarter increased by 1 % to 11 Mt. Guidance for the 2017 financial year remains unchanged at 44 Mt. Energy coal production for the September 2016 quarter decreased by 4 % to 7 Mt . Guidance for the 2017 financial year remains unchanged at 30 Mt. Nickel West production for the September 2016 quarter decreased to 19kt of nickel as in-process nickel matte stocks were replenished within the integrated production chain.
CEO, Andrew Mackenzie, said: »Full year production and unit cost guidance remains unchanged. Safety and productivity continue to improve with our new operating model helping us identify and replicate best practice more quickly. We have seen early signs of markets rebalancing. Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term. Together, the combination of steadier markets, continued capital discipline, improved productivity and increased volumes in copper, iron ore and metallurgical coal should further support strong free cash flow generation this financial year.«
