Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (November 2011)
60 slides from Bhp's investor presentation, Nov 14, 2011
Slide 1: Form 6-K Report of Foreign Private Issuer
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 November 14, 2011 BHP BILLITON LIMITED BHP BILLITON PLC (ABN 49 004 028 077) (REG. NO. 3196209) (Exact name of
Slide 2: BHP Billiton Petroleum Onshore US shale briefing
BHP Billiton Petroleum Onshore US shale briefing J. Michael Yeager Group Executive and Chief Executive, Petroleum 14 November 2011 bhpbilliton resourcing the future
Slide 3: Disclaimer
bhpbilliton available relied Reform involve statements “Forward construed 14 November upon Act known sources looking ascontained resourcing as of either 2011 a1995 and recommendation that statements” an unknown Slide regarding in have offer the this 2future not to presentation. risks, sell and futur
Slide 4: Briefing agenda
bhpbilliton Petroleum Bhpbilliton §?Introduction §?Part J. Michael 1: Technical 2: Business briefing Yeager, resourcing resourcing Group update agenda overview the theExecutive future future of the shale and Chief industry Executive, Petroleum, 14 November 2011 Slide 3
Slide 5: BHP Billiton Petroleum at a glance
bhpbilliton 7th gas Shenzi Atlantis Pyrenees Liverpool ROD Minerva Angostura North Bass Fayetteville, Eagle J. Michael largest company Strait Zamzama Ford West Neptune Mad Stybarrow Bay Yeager, independent resourcing Shelf Haynesville, by Dogtotal Group resource the upstream Executive future oil and
Slide 6: Outstanding safety performance
0 bhpbilliton Outstanding Petroleum (Number 1 2 3 4 5 10Michael 0 FY06 50 40 30 20 Recordable Total J. (TRIF) ofconventional resourcing incidents) safety recordable FY07 Yeager, incidents FY08 performance injurythe FY09 Groupbusiness futureFY11 frequency FY10 safety Executive Q1performance (TRIF) an
Slide 7: Strong production growth
bhpbilliton Strong 1st Production (Net, FY07 450 400 350 300 250 200 J. Michael back Mboe/d) FY08 production to Yeager, work volumes resourcing FY09ingrowth FY10 Group thethe Gulf FY11 Executive future of Mexico and Chief Executive, Petroleum, 14 November 2011 Slide 6
Slide 8: Part 1: Technical overview of the shale industry
bhpbilliton Part J. Group 14 Michael November 1: Executive Technical Yeager resourcing 2011 overview and Chief the future of Executive, the shale Petroleum industry
Slide 9: Conventional versus unconventional reservoirs
bhpbilliton Conventional §?Conventional §?The §?Unlike §?Shale Schematic J. Michael pore reservoirs aYeager, geology conventional resourcing spaces andreservoirs gas are Group in ofshale reservoirs natural deep, thefield, Executive future have reservoirs with gas the sufficient versus depths resourc
Slide 10: Extracting shale resources with hydraulic fracturing
bhpbilliton Extracting J. §?To §?Hydraulic to §?Fracing 35,000 Impact (Cumulative 2 0 10,000 7,500 5,000 No 4-year fracturing Source: Current technology (Years) ,500 10 Michael provide hydraulic 20 produce old wells of 30 Company hydraulic has aYeager, shale 40 resourcing path fracturing production,
Slide 11: Advancements in shale technology
bhpbilliton Advancements J. 1821 well gas Natural 1860s-1920s use producing low shales developed Technology 1930s diameter natural grows Hydraulic 1947 first employed County, Source: Development downhole accelerates to Slide drilling First 1980s-1990s horizontal Early Initial the in Multi 2002-2008
Slide 12: Short development timeline
Short preparation J. of Preparation fracturing 2-4Michael the weeks development site Production Drilling 2-4 Yeager, to production weeksHydraulic Group timeline 2-4 weeks Executive fromDecades siteand Chief Executive, Petroleum, 14 November 2011 Slide 11
Slide 13: Site preparation
bhpbilliton Preparation §?Setting – §?Drilling J. Levelling Structures Construction Placement Michaelupmultiple Yeager, resourcing of for of a the well of racks erosion roads lined site Group site wells tothe pits takes hold control for from Executive future the tothe 2-4 hold atransport drill singl
Slide 14: Drilling
bhpbilliton Routine §?The §?Drilling §?Directional §?Horizontal §?A Schematic J. Michael production well drilling is Yeager, of resourcing construction continued drilling horizontal drilling casing operations Group within commences the string vertically drilling process Executive future the is insta
Slide 15: Hydraulic fracturing process (1)
bhpbilliton Hydraulic 1. 2. 3. J. Michael The Fluidperforation horizontal andfracturing Yeager, resourcing proppant section tunnels Group –(sand) theof Executive future that process the areare wellbore pumped created and Chief is into provide perforated the Executive, well communication with at high
Slide 16: Hydraulic fracturing process (2)
bhpbilliton Hydraulic 4. 5. 6. J. Michael After The Fractures fracturing allfracturing Yeager, frac resourcing are stages created and Group –pumping are the andExecutive completed, future process expanded process and the through isChief repeated plugsthe Executive, arepumping atdrilled multiple Petr
Slide 17: Hydraulic fracturing surface operations
bhpbilliton Hydraulic §?Surface §?Supplies §?A §?Once Example J. Michael typical the offracturing product Yeager, are resourcing fracture well surface transported uses intensive Group equipment operations equipment 100,000 the Executive future tofracturing location barrels used are consists complete
Slide 18: Minimal environmental footprint
bhpbilliton Minimal When Well The Landowners Producing J. Michael initial production wells sites drilling environmental include are shale Yeager, footprint resourcing are monitored isphase normally gas completed, the Group is well well(s) creates minimised the impact remotely Executive royalty futur
Slide 19: Sustainable development and areas of concern
bhpbilliton Sustainable Positive §?Energy §?Employment §?Lower §?Attractive Areas §?Quantity §?Chemicals §?Aquifer §?Seismic §?Air J. Michael and of impacts concern carbon security noise and activity Yeager, resourcing of resources landowner used water groundwater opportunities pollution emissions f
Slide 20: Efficient water use
bhpbilliton Efficient Water Confined Withdrawals On BHP Shale Source: J. Michael a Billiton per gas isIHS critical unit alternate to plays Yeager, resourcing the CERA from continues of and drilling to energy water lakes shale Group and population the basis, to phase, US and gas forms Executive evalu
Slide 21: Chemicals used in hydraulic fracturing
Chemicals of J. Typical shale §?Hydraulic 99.5% – enable prevent §?BHP companies chemical Source: Chemical Michael thefracturing hydraulic water proppant Billiton composition damage US additives Yeager, represent toadditives Department fracing and voluntarily has mixture fracturing to transport sand
Slide 22: Groundwater protection
bhpbilliton Multiple J. afractures §?As well surrounding concentric §?Fracture §?The used concentration and making than Greater Schematic relative Shale Aquifer mile Michael traceable industry 1bore are with deeper mile horizontal small to them relatively barriers are isaquifers all Yeager, steel of
Slide 23: Shale versus coal bed methane
bhpbilliton Shale CBM Significant Landowners J. Michael versus developments Yeager, amounts resourcing in Coal USBed Group shale of arethe Methane water typically developments Executive future are(CBM) produced much andmay shallower Chief when receive Executive, coal than direct seam shale, Petroleu
Slide 24: Safe water disposal
bhpbilliton Safe All Shale Water Although Combined J. Michael oil groundwater gas disposal andother production Yeager, with gas resourcing operations options options sound operations Group involves operating the include areExecutive involve future viable, ensure the underground practices, disposal t
Slide 25: Water disposal and seismic activity
bhpbilliton Taking Water Reviews Nonetheless, BHP J. Michael Billiton disposal concerns byYeager, resourcing scientists two will via aBHP continue prudent deep Group atthe Billiton underground regulatory Executive future relating to dispose water approach agencies and injection of water Chief have t
Slide 26: Other local impacts
bhpbilliton Other Local The BHP J. Michael trade Billiton Billiton’s impacts off Yeager, resourcing between complies (such on operating local Group aslocal the with populations land areas Executive future impacts all disruption, are environmental primarily andair the Chief quality economic low regul
Slide 27: Natural gas and greenhouse gas emissions
bhpbilliton Natural When As BHP J. Michael a corporation, Billiton reasonable source Yeager, resourcing sets gasassumptions our corporate Group is agoal the clean Executive future isemissions to and about reduce efficient and industry reduction our Chief energy greenhouse practices Executive, target
Slide 28: Key messages on hydraulic fracing
bhpbilliton Key Hydraulic Rigorous We J. Michael will engage do messages not develop assessments fracing expect Yeager, resourcing regularly, our any isGroup essential shale openly material of theall Executive future assets our and for change operations in honestly shale line and to development with
Slide 29: Part 2: Business update
bhpbilliton Part J. Group 14 Michael November 2: Executive Business Yeager resourcing 2011 update and Chief the future Executive, Petroleum
Slide 30: Agenda
USMichael Agenda BHP Business J. shale Billiton’s outlook overview Yeager, shale Group assetsExecutive and Chief Executive, Petroleum, 14 November 2011 Slide 29
Slide 31: What makes US shale work?
What J. Rig Large availability services Landowners market royalty fiscal regulators Supportive Low density Slide geology Attractive network pipeline Extensive areas development NotMichael and all population 30 makes terms US shales owners in gas Yeager, as UShave shale Group thiswork? combination Ex
Slide 32: Continued positive support for shale
leading Continued Strong Supply Increases Industry’s Possible J. Michael state dependability Increasing boost US transparency Yeager, positive support energy to the to Group movement due self US greater key and to economy sufficiency Executive tojobs, technology new transparency oftaxes support long
Slide 33: Significant ramp up in onshore US shale
0 bhpbilliton Significant J. Source: 1 2 3 4 5 6 Michael Wood Yeager, ramp resourcing Mackenzie. upGroup in the onshore Executive futureUS shale and Chief Executive, Petroleum, 14 November 2011 7 Jan 0832 Eagle Marcellus Fayetteville Barnett Slide (Bcfd) Production Haynesville Ford Jul 08 Jan 09 Jul
Slide 34: US gas supply altered
bhpbilliton supply altered §Increased customers §Natural low §Shale total §As substantiated, will §?LNG purchases Slide Source: US (Bcfd) Conventional 2 0 2005 100 80 60 40 Power Shale 0 natural carbon be long US 2010 J.Gas gas Non by the gas forecast absorbed Michael export Wood gas gas term foreca
Slide 35: What BHP Billiton brings to shale
What Functional Systematic Long Scale Financial .Managerial J. all Michael toterm BHP and create ability leverage Yeager, technology excellence Billiton improvement approach longtoterm Group to do brings to service approach: more gains shareholder run to Executive todrilling/hydraulic four now the d
Slide 36: Agenda
USMichael Agenda BHP Business J. shale Billiton’s outlook overview Yeager, shale Group assetsExecutive and Chief Executive, Petroleum, 14 November 2011 Slide 35
Slide 37: Capturing four concentrated opportunities
Capturing §Four concentrated §Core §Long-life, §Attractive base cost/returns economic §Proximity allows §?Each opportunities for J. Liquids DryMichael long gasextremely positions price field area term returns aYeager, position to expandable curve, significant arbitrage offers acreage economic theinl
Slide 38: Fayetteville field
Fayetteville §Second §Shallow §Excellent §?Current §?Total §?Initial §?BHP Slide Field BHP Operated Van Individual Pope Conway Faulker White Initial EUR D&C Rate BasedBuren of Billiton 3.2 J. outline cost production on Billiton return Michael risked of service largest Bcf acreage November reservoir
Slide 39: Eagle Ford and Hawkville
returns §?Petrohawk Eagle §?Rated North §?Attractive and §?Highest §?Average approximate §?Current 52 §?Total (42% §?Ramping §?Potential recovery Slide 1. 2. 3. Isopach Black Field Hawkville Wood Pritchard Net Mboe/d NGL J. liquids) Ford American Hawk acreage of Michael net risked map as Mackenzie.
Slide 40: Eagle Ford: Hawkville field
Hawkville Eagle §?224,000 §?Contributes 180 §?Total §?Liquids §?Ramping J. 24,500 10 Equivalent Slide (Bcfe) 5 613 250 195Michael Bcf0 MMcfed 39 Ford Individual 8.5 production Initial EUR 207 D&C Rate Based MMcfd bbl/d Mbbl of 2.5 5.0ftreturn MMcfd risked cost on Bcfe pipeline Yeager, has net EUR Bc
Slide 41: Eagle Ford: Black Hawk field
Black the §?Black shale §?High §?Liquids economics §?58,300 §?Current §?Total §?Ramping J. Equivalent Slide (Bcfe) 25,500 10 Individual Initial EUR D&C Rate Based Michael Bc0 play of 1.8 portfolio 40 cost Hawk production on ftBcf return liquid risked Hawk Bcf net November net pipeline US$9.9 well Ye
Slide 42: Haynesville shale play
0 Haynesville shale J. Source: 1 2 3 4 5 6 Michael play Wood in Yeager, isthe Mackenzie. now USGroup the highest Executive producing and Chief Executive, Petroleum, 14 November 2011 7 Jan 0841 Eagle Marcellus Fayetteville Barnett Slide (Bcfd) Production Haynesville Ford Jul 08 Jan 09 Jul 09 Jan 10 J
Slide 43: Haynesville field
8 Average field §?BHP in – Haynesville, §?Petrohawk achievements §?Direct ample §?Average US$15 §?Current §?Total 90 Slide Haynesville Individual Initial EUR D&C Rate Strong Core Natural the acre in of 8J. cost highest production capacity of Bcf million Billiton the well return Michael Bcf risked ac
Slide 44: Higher recovery through well management
0 bhpbilliton Higher §?Petrohawk management §?Choking production §?Holding recovery fractures – Slide 2 10Average 4 6 8 Q3 Q4 Q1 Q2 J. EUR Average Michael Restricted (Bcf) open non-restricted restricted more increases back resourcing Non-restricted Gas (MMcfd) FY08 FY09 FY10 FY11 productionwith in p
Slide 45: Permian opportunities
Permian §?481 opportunities the §?Recent shale 325,000 operated §?Primarily §?A horizons appraisal currently §?Very §?No Slide 1. South Midland North Basin Delaware Net Permian highly area J. volumes rigs acreage positive Michael net Basin working drilling wells entry with currently prospective targ
Slide 46: Distinct field advantages
Highdistinct Slide Field Fayetteville §?Shallow/brittle Eagle §?Scale/leverage §?Industry §?Rig §?Reduced Haynesville §?Highest §?Controlled §?Shallower Permian §?Multiple §?Un-appraised §?Additional Overall with §?Immediate §?Multiple, opportunities quality Advantages J.Ford ramp Michael §?Four §?P
Slide 47: Agenda
§US shale Agenda §?BHP §Business Slide J. Billiton’s Michael outlook overview Yeager, shale assets Group Executive and Chief Executive, Petroleum, 14 November 2011 de 46
Slide 48: Shale volumes complement conventional
Shale volumes §?Conventional capability expandable §?Shale cost Slide Conventional Yes 5+ Years Limited Shenzi years Geologic per J.offers Payback Limited Michael well, developments complements is Flexibility and 1st is ripe in the production limited earnings EUR risk Feature both Months for Expanda
Slide 49: Shale production value chain
Shale §?Production as §?Crude §?Gas §?Reporting differentials Slide Stock Wet Crude (midstream) Wells condensate Dry Natural liquids GParso a royalty gas J.value Separation tanks and price (NGL) cperossciensgs Michael Gas gas andchain NYMEX Liquids of condensate isthe gathered Yeager, ‘upstream’ (NG
Slide 50: Components of profitability
Components J. profitability §?Gas Revenue §?Liquids §?Third Cash §?Gathering §?Transportation §?Midstream §?Upstream §?Secondary Non-cash §?Acquisition §?Capital Slide Michael costs 49 revenue party depreciation costs revenue Yeager, operating and of taxes operating gathering amortisation Onshore pr
Slide 51: Onshore US shale cost analysis
Onshore Slide analysis §?FY12 (or rising §?Liquids US$1.20-1.70/Mcfe driven §?Cash next non-recurring §?Non-cash the acquisition Note: 90 next two J.FY12 with MMboe) by costs Michael two production US years, growth component and rig costs guidance costs shale years, averaging retention ramp midstrea
Slide 52: Long term improvements
Long FY12 improvements §?Early §?Retention §?Major §?Excess Sources §?Liquids §?Scale §?Optimisation §?Advances J. Michael term impacted stage of systems transport percentage Yeager, service plans improvement programs inoffracing of by liquids yield costs well contracts Group short capacity to signi
Slide 53: Market focus and gas price outlook
3 Market §?Gas dependability §?Higher even §?Lower declining, count – liquids smaller §?Potential investments Slide NYMEX (1 4 5 6 7 Held Drilling Financial November 2012 in J.demand by 2013indicates the players Michael gas natural cost focus production lowering same circumstances for drilling 2011,
Slide 54: Onshore US shale forecast
0 Onshore Slide Forecast (Net, 1 2 3 4 5 6 Bcfe/d) J. Michael production US shale Yeager, outlook ratesGroup (excluding Executive Permian) and Chief Executive, Petroleum, 14 November 2011 de 53 7 8 F Forecast (Net, 1 0 2 3 4 Y12Freal, FY15F capital US$ FY20F billion) spend 5 6 7 FY12F Note: 600 250
Slide 55: Onshore US shale fit for BHP Billiton
Onshore fit J. §?World – §?Access §?Low §?Long §?Large §?Stable Large, Michael for BHP risk term operated long-life, US class operating toYeager, Billiton due the shale investment accessible to world’s positions, is adequate low Group environment ancost, excellent largest matches resource, Executive
Slide 56: Petroleum's resource base growth
A,000 J. §?In Petroleum’s grown 11 §?BHP the oil based §?Onshore return and technology 1. 1 6 0 20 30 Petroleum 12,000 Petrohawk acquisition Fayetteville Combined Resources Proved (MMboe) Non-proved 3.7 Potential 1.7 5.9 11.3 Independent BOE (Billions Chesapeake, Devon, Marathon, Pre-acquisitioPost-
Slide 57: Full potential production outlook
Full J. §?FY12 §?Onshore major Australia §?Potential business §?Sustained the 5 0 2,000 1,500 1,000 Production (Net, FY11 Notes: FY12 00 Michael decade Petroleum Mboe/d) FY12F actual guidance growth volume in and Yeager, with US rates less togrowth reflects FY15F the projects become shale outlook re
Slide 58: Key messages
Key §?BHP the each §?Shale geology §?Rig anticipated market §?Developments and §?Significant developments resources J. Michael largest, will messages with ramp conditions Billiton economics and beand unique Yeager, highest volume managed up liquids shareholder long in has are advantages quality Grou
Slide 59: resourcing the future
bhpbilliton resourcing the future
Slide 60: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BHP Billiton Limited and BHP Billiton Plc Date: November 14, 2011 By: Jane McAloon Name: Jane McAloon T