BHP Billiton Ltd., Australia’s largest oil and gas producer, expects to produce more petroleum liquids from its land area in the U.S. after gas prices dropped to their lowest in ten years. “In the current climate of depressed gas prices, we continue to focus our efforts on the most productive areas of our quality area”, the Melbourne-based company said in the first half of the earnings statement today. Liquids such as shale oil will be 20 percent of the onshore U.S. production account in 2015, BHP said without a comparative figure.
BHP, also the world’s largest mining company, said it plans to more than double the total annual expenditure on petroleum exploration to $ 1.4 billion after buying American shale assets last year. BHP bought Petro Hawk Energy Corp. for $ 12.1 billion in cash and assets from Chesapeake Energy Corp. bought for $ 4.75 billion.
The first half underlying profit before interest and taxes for the oil and gas division, headed by Chief Executive J. Michael Yeager, climbed 38 percent to $ 3.94 billion, an increase in oil prices, BHP said today. The average realized natural gas price was “largely unchanged” at $ 3.85 per thousand cubic meters, the company said.
“What Mike wants to do is probably less gas activity than he intended and probably on balance a little more oil activity,” BHP’s Chief Executive Officer Marius Kloppers told reporters on a conference call today.
American natural gas prices have fallen to a 10-year low, while the oil price was 40 percent in the past two years. Royal Dutch Shell Plc, Europe’s largest energy company, the investment focus to oil-rich shale in the U.S. due to lower natural gas prices, the company said Feb. 2.
source:reuters
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