BHP BILLITON has adjusted its total forecast petroleum production for 2014 to about 245 million barrels of oil equivalent following well remediation activity and the divestment of a UK oil and gas field.
The production guidance was 5 million barrels down on the BHP Billiton share of 250 million barrels of oil equivalent predicted in December 2013, the company announced in an operational review.
The fall comes following the Australian company’s sale of its 46.1 per cent operating stake in the Liverpool Bay field to its partner Eni for an undisclosed sum.
The fall also reflected lower gas and natural gas liquids production in the Hawkville area of the Eagle Ford, although the company said well remediation activities had now been completed.
Despite the reduction in full year guidance, BHP Billiton said its losses had been mitigated by an increased contribution from higher-margin crude and condensate, predominantly from the company’s operations in the Gulf of Mexico.
Oil and gas production from the Atlantis field, also known as Green Canyon 743 in the Gulf of Mexico – in which BHP Billiton has a 44% working interest – had doubled after the start-up of a production well in the September quarter of 2013, the company said.
“We expect to carry strong momentum at Atlantis into the 2015 financial year with a further two production wells scheduled for completion in the coming months,” the company said.
The company expects total oil and gas production of about 107 million barrels of oil equivalent from its assets in the onshore United States for the 2014 financial year, which it said was due to a lower contribution from natural gas.
The company focused 75% of its gas drilling activity in its Black Hawk acreage in the Eagle Ford, a move which helped see natural gas production fall 5% to 624 billion cubic feet in the nine months to March 2014.
BHP Billiton’s Jansen Potash project in Canada was on budget, being about 25% complete, the company said, with shaft excavation beginning again in the March quarter of 2014 following a review of activities.
This meant that shafts on the project would not be completed during the earlier approved timeframe, with forecast spending now expected to be 25% below the previously set guidance of US$800 million.
“With our investment premised on the attractive longer-term market fundamentals for potash, we will continue to modulate the pace of development as we seek to time our entrance to meet market demand, thereby maximising shareholder returns,” the company said.