BHP Billiton

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Riding on the future growth in industrialisation and urbanisation rate, BHP Billiton would be able to sustain its growth in the next several decades to come as the world's largest diversified mining company.

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For over 150 years, we have been developing and contributing to industry, communities and economies around the world.

Formed from a merger between BHP and Billiton, we value our heritage and the strong foundations on which our company is built. From two small mining companies founded in the mid-1800s, we are now a world leader in the diversified resources industry.

The history of Billiton

Billiton’s roots trace back to 1860 and a tin mine on a little known island in Indonesia, Billiton (Belitung) island. Billiton became a global leader in the metals and mining sector and a major producer of aluminium and alumina, chrome and manganese ores and alloys, steaming coal, nickel and titanium minerals. Billiton also developed a substantial and growing copper portfolio.

The history of BHP

Broken Hill Proprietary’s rich history began in a silver, lead and zinc mine in Broken Hill, Australia. Incorporated in 1885, BHP engaged in the discovery, development, production and marketing of iron ore, copper, oil and gas, diamonds, silver, lead, zinc and a range of other natural resources. BHP was also a market leader in value-added flat steel products.

The merger of two great companies

BHP and Billiton merged in June 2001 becoming one of the world’s largest diversified resources company. We now have significant positions in major commodity businesses including aluminium, energy coal and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver and titanium minerals, and substantial interests in oil, gas, liquefied natural gas and diamonds. To find out about our achievements since the merger, read our BHP Billiton chronology.

150 years of history

In 2010, we celebrated our 150th anniversary and three significant milestones: Billiton's establishment on 28 October 1860, BHP's incorporation on 13 August 1885 and BHP Billiton's listing on the Australian and London Stock Exchanges on 29 June 2001. By building on our past and combining the assets of each company with the very best of our skills and people, BHP Billiton is ideally placed to continue to lead the resources industry into the future.

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BHP Billiton is the largest diversified resources company in the world. Many people may not realise that it also has petroleum division in its arm. Although BHP's petroleum business is still small compared with the Major like ExxonMobil, Chevron and Shell, its move into shale gas in USA from $4.75 billion deal to acquire Fayetteville assets from Chesapeake and the recently announced $12.1 billion acquisition of Petrohawk would increase its petroleum resources by several folds. It has firm plan to increase its petroleum production to 1 million boe/d by 2015 (double the current production figure).

Natural gas is perceived as a clean fossil fuel energy which stands to benefit from global climate change concern. I think BHP understands that well and therefore positions itself into the booming shale gas industry in USA which fits its company slogan of investing in tier 1, large, low-cost and long life assets.

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Some critics on the latest Petrohawk acquisition deal. The price BHP is going to pay is quite dearly. Huge CAPEX is required to develop the assets. And the natural gas price must rise above the current level to make profits. Time will tell who is right.

THE clock is ticking on the career of BHP Billiton chief executive Marius Kloppers after his courageous $US12.1 billion ($A11.3 billion) bet on US shale gas producer Petrohawk Energy, with some investors sharing Slugcatcher’s view that it is a dud deal.

Friday’s stock market reaction to BHP Billiton’s second plunge into US shale gas was sobering. While it looked like a simple 71c share-price fall, it actually represented the wiping of $A2.3 billion off the company’s value on the ASX.

What investors did not like is the price being paid for Petrohawk, and the promise (threat?) that much more is required to fully develop the target’s shale-gas assets.

One estimate is that BHP Billiton will have to commit at least $US5 billion a year in working capital to build Petrohawk’s assets in Texas and Louisiana into the world-class business that BHP Billiton says it wants.

Some BHP Billiton shareholders would be happier to see that money returned as dividends, or via an enhanced share buy-back program.

Some are suffering a sense of Déjà vu as their company does what it did in the 1990s: tosses money at projects that management likes, shareholders fear – and which fail to deliver the promised profits.

Back then, billions of dollars was wasted on adventures in titanium minerals, platinum, copper, and iron ore processing – to the point where rival miner Rio Tinto thought about making a takeover bid for BHP Billiton.

It is history that the worm turned full circle and it became BHP Billiton which eventually bid for Rio Tinto, only to fall at a set of government hurdles.

Failure to acquire Rio Tinto (twice) and failure to acquire Canada’s Potash Corporation left BHP Billiton without the corporate growth options craved by a management team which needs such deals to justify its existence.

Enter Petrohawk, a business which has been developed quite brilliantly by Floyd Wilson, a classic southern US “good old boy” who has forgotten more about US oilfield deal-making than Marius Kloppers thinks he knows.

Founded just eight years ago Petrohawk is a child of the shale gas sector and a perfect example of what Wilson has been doing for a living for the past 40 years – building a business, and then selling for a fat profit.

He did it first with Hugoton Energy, which he sold to Chesapeake Energy for $US380 million.

He did it again with 3Tec Energy when he sold that business to Plains Exploration for $US443 million.

But nothing comes close to his Petrohawk deal, given that the company started life with $US60 million in foundation capital – the seeds of a BHP Billiton cheque for $US12.1 billion.

Not only is Wilson’s capital gain over just eight years quite astonishing but the price premium being offered by BHP Billiton to land Petrohawk is absolutely gobsmacking – 65% above the target’s last share sale.

From BHP Billiton’s perspective the cash splash (and it is all cash) makes it a bigger player in the fast-growing US shale gas sector, following on an earlier $US4.75 billion deal to buy a slice of Chesapeake’s shale acreage.

But getting big in US shale gas, and its associated flow of liquids, is a risky business and assumes that gas prices in the US will rise to justify the Petrohawk price or that BHP Billiton management will be able to grow a big shale gas business which can keep costs low.

There are multiple problems with those aims. They include:

Gas prices in the US showing no sign of rising above an unprofitable $US4.40/mbtu, with the country suffering an acute gas glut.

Estimates by investment banks, such as UBS, that a gas price of $US5.50-6.00/mbtu is required to make a profit from shale gas, which is more expensive to develop than conventional gas.

The US economy stagnating, with annual growth stuck at around 2% – insufficient to generate employment growth or industrial investment.

The value of the US dollar possibly falling sharply as early as next month if a political settlement is not reached over the country’s debt ceiling.

It is into this cocktail of low gas prices, low profits, minimal growth potential, and the prospect of a falling currency that BHP Billiton has mailed over $US12.1 billion of the cash earned from mining iron ore and coal in Australia.

History, sadly, could easily be repeating itself at BHP Billiton as yet another team of executives generates deals which management reckons are value creating, but which turn out to be dogs.

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BHP Billiton ประกาศผลประกอบการปี 2010/2011 (ending June 2011) แล้วครับ รายได้และกำไรสุทธิเติบโตจากปีก่ออนหน้าสูงมากจากราคาสินค้าโภคภัณฑ์ที่ปรับตัวสูงขึ้น บริษัทมีรายได้ประมาณ USD 70 billion มีกำไรสุทธิ USD 23 billion และ มี cashflow สูงถึง USD 30 billion บริษัทใช้ CAPEX ไปประมาณ USD 12.8 billion ในปีที่ผ่านมา และสำหรับในปีนี้คาดว่า CAPEX จะสูงถึง USD 20 billion

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แปลกจังครับ ADR ของ Ltd ราคาถูกกว่า ADR ของ Plc ถึง 20% ทั้งๆที่สิทธิในบริษัททุกประการเหมือนกันหมด

BHP Billiton เป็น dual listed ตั้งแต่ 2001 หลังจากที่มีการควบรวมกิจการระหว่าง BHP และ Billiton คือ จดทะเบียนในตลาดหลักทรัพย์ออสเตรเลียในชื่อ BHP Billiton Ltd และ ในตลาดหลักทรัพย์ลอนดอนในชื่อ BHP Billiton Plc ราคาของ Ltd จะมีพรีเมียมตลอดราวๆ 5%-10% โดยเฉลี่ย แต่ในช่วงหลายเดือนที่ผ่านมา premium ถ่างออกเป็นมากกว่า 20%

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ขอแก้ไขครับ

ADR ของ Ltd ราคาแพงกว่า ADR ของ Plc ถึง 20%

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Presentation given by BHP Billition Petroleum Division on 14 Nov 2011 at Melbourne about the shale gas industry. Part 1 describes the industry as a whole while Part 2 focuses on business model.

http://www.bhpbilliton.com/home/investo ... tation.pdf

http://www.bhpbilliton.com/home/investo ... script.pdf

Meanwhile the share price is decending fast.

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Presetation ละเอียดดีครับ ผมเคยดูพวก Shale Play เพียวๆอย่าง Chesapeake ดูไปดูมา ไม่กล้าซื้อลงทุนเนื่องจาก Debt เยอะมากๆ บริษัทอยู่ได้ด้วยการขาย Stake ใน Shale ที่มี หรือว่าการเพิ่มทุน เพราะราคา NG ปัจจุบันนั้นต่ำมาก และนอกจากนั้นแต่ละ Shale มี reserve เยอะหรือน้อยเราก็ทราบได้จาก Management Guidance อย่างเดียว ครึ่งปีที่ผ่านมา ตั้งแต่ BHP ซื้อ PetroHawk ไป ผมคิดว่ามีการไล่ราคากลุ่ม Shale Gas กันขึ้นมายกใหญ่ เมื่อ 2 เดือนก่อน แต่ละตัวอยู่กันแถวๆ New High ตอนนี้กลับกันเริ่มๆทำ Low แล้ว แต่กรณีที่ BHP ลงคงเพราะราคา Commodities ลงมากกว่าละมั้งครับ

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เมื่อ 3-4 ปีที่แล้ว BHP ขออนุมัติรัฐแคลิฟอร์เนียเพื่อก่อสร้าง LNG Import Terminal แต่โครงการดังกล่าวไม่ได้รับการอนุมัติ มาวันนี้สถานการณ์กลับกันอย่างสิ้นเชิง มีความเป็นไปได้ที่อเมริกาจะเป็นผู้ส่งออก LNG ซึ่งเป็นเพราะแหล่ง shale gas นี่เอง และก็เพราะการพัฒนาทางด้านเทคโนโลยีที่ทำให้ผลิต shale gas ได้มากขึ้น ทำให้ราคา NG ในอเมริกาถูกอย่างในปัจจุบัน

BHP มองอนาคตว่าราคาก๊าซจะสูงขึ้นจากในปัจจุบันในระยะกลาง ด้วยปัจจัยหลายๆอย่าง เช่นการฟื้นตัวทางเศรษฐกิจ การออกกฎหมายเกี่ยวกับ climate change ซึ่งจะสนับสนุนการใช้ NG มากกว่าถ่านหิน นอกจากนี้ ในแหล่ง Eagle Ford ยังมีน้ำมันดิบและ NGL ทำให้ economic return สูงกว่า แหล่ง pure shale gas อย่างไรก็ดี ทั้ง 4 Assets ที่ BHP เป็นเจ้าของ มี characteristics ที่ต่างกัน และ BHP มองการลงทุนดังกล่าวเป็นการลงทุนระยะยาว 30 ปี ทำให้ BHP ค่อนข้างมั่นใจว่าการลงทุนดังกล่าวจะให้ผลตอบแทนต่อผู้ถือหุ้นเป็นที่น่าพอใจ

BHP ยังคงใช้กลยุทธ์ในการเป็น low cost producer เพื่อสร้างความได้เปรียบในการแข่งขันในตลาด commodity

สภาพตลาด ณ ปัจจุบันเต็มไปด้วยข่าวร้ายและมีความไม่แน่นอนสูง ราคาหุ้นของ BHP จึงปรับตัวลงมาค่อนข้างมาก

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ใน presentation ที่ Mike Yeager นำเสนอเกี่ยวกับธุรกิจ Shale gas นั้น เขาได้เอ่ยถึงบริษัท 3 บริษัทที่เป็นผู้นำในแต่ละ field ที่ BHP Billiton เข้าไปลงทุน สามบริษัทนั้นมี EOG ที่แหล่ง Eagle Ford, Encana ที่ Haynesville และ Southwestern Energy ที่ Fayetteville ครับ

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เก็บไว้เป็นสถิติครับ BHP Billiton ซื้อแหล่ง Shale Gas ในอเมริกาในราคาเฉลี่ย 44 cents/Mcf ในขณะที่ราคาเฉลี่ยของ top ten deal อยู่ที่ 66 cents/Mcf

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ผลประกอบการครึ่งปีแรกของ FY12 ครับ

http://www.bhpbilliton.com/home/investo ... -2011.aspx

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US Shale and Australian Nickel Asset Review
August 03, 2012


BHP Billiton announced today that it has completed its full year assessment of its United States shale and Australian nickel assets. Low US gas prices due to a short term over supply of gas have resulted in an impairment of US$2.84 billion (before tax) against the carrying value of the Fayetteville shale gas assets acquired from Chesapeake Energy in February 2011. The Company will also recognise a US$450 million (before tax) charge against the carrying value of its Nickel West assets as a result of margin deterioration. Both impairments will be recognised as exceptional items. The annual review of the Company’s non-current assets will be finalised in conjunction with the preliminary financial results to be released on 22 August 2012.

BHP Billiton CEO, Marius Kloppers, said “The Fayetteville charge reflects the fall in United States domestic gas prices and the company’s decision to adjust its development plans by shifting drilling from dry gas to the more liquids rich fields. While we have responded appropriately to the changed market conditions today’s impairment is clearly disappointing.”

Following a comprehensive review, BHP Billiton has concluded that the value of the more extensive onshore United States shale liquids and gas assets acquired through the acquisition of Petrohawk Energy Corporation in August 2011 is not affected. The development of these assets is expected to create substantial, long term shareholder value.

Mr Kloppers said: “Our decision to enter the North American shale hydrocarbon business about 18 months ago was taken after extensive deliberation and due diligence. Our work convinced us that this significant, low-carbon fuel source would play a meaningful role as the world makes its future energy choices. We are still of this view, particularly given the ongoing positive technological advancements in the shale industry.

"We believe that our dry gas assets are well positioned for the future given their competitive position on the industry cost curve. In the short term, the accelerated development of our liquids rich shales will continue to complement investment in our traditional project pipeline given the high rates of return on offer and the rapid payback on incremental investment.”

BHP Billiton Chairman, Jac Nasser, said: “The Board remains of the view that the investment in the US shale assets is the right decision for BHP Billiton shareholders. The assets we acquired, in particular the substantial Petrohawk business, are of high quality and will generate good returns for shareholders. The Board supports the actions of Marius and Petroleum CEO, Mike Yeager, to optimise shareholder value by shifting our current drilling plans from the dry gas fields in Fayetteville and Haynesville, to the liquids rich fields in the Permian and Eagle Ford.

“However, it is very disappointing that low US gas prices have impacted the carrying value of the Fayetteville assets. As a result of the write down both Marius Kloppers and Mike Yeager have advised the Remuneration Committee that they do not wish to be considered for a bonus for the 2012 financial year. The Remuneration Committee and the Board respect and agree with that decision.

"As today’s announcement shows, these are difficult times, particularly for those companies and their shareholders who are being affected by global uncertainty. We are fortunate to have Marius’ leadership, together with a strong management team supporting him, in these challenging times. Notwithstanding the prevailing environment we are confident in the outlook for the United States natural gas market and the role our shale assets will play in BHP Billiton’s portfolio in continuing to deliver long term shareholder returns,” Mr Nasser said.

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ผ่านมาได้ประมาณ 3 ปีหลังจากเข้าซื้อแหล่ง Fayetteville จาก Chesapeake ในราคา USD 4.75 billion มาวันนี้ต้องปรับลดมูลค่ามากกว่า 50% (คิดเป็นมูลค่า USD 2.84 billion) ไม่ใช่เพียงแค่ BHP Billiton ที่ปรับมูลค่าใน shale gas assets ที่ซื้อมา ยังมีอีกหลายบริษัทที่ต้องปรับลดมูลค่ายุติธรรมเช่นกัน เช่น

Encana - USD 1.7 billion pre-tax
BG Group - USD 1.3 billion pre-tax
BP - USD 2.1 billion (part) after tax
Apache - USD 480 million after tax

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Presentation during the onshore US shale gas media tour

http://www.bhpbilliton.com/home/investo ... iefing.pdf