BHP mans all pumps in the US
May 15, 2012 (Aussie time)
BHP Billiton's Fayetteville Shale, USA. Photo: Alan Baxter
"BHP Billiton is accelerating the recovery of 1.5 billion barrels of liquid hydrocarbons from the Eagle Ford and Permian fields in the US as it attempts to avoid a multibillion-dollar write-down of its US shale assets.
BHP petroleum chief Mike Yeager yesterday said the recovery target had been increased by half a billion barrels in the past six to eight months and he extolled the company's $US20 billion acquisitions of Fayetteville and Petrohawk, which had given it a premium position on the ''unique'' Haynesville shale play, the largest gasfield in the US.
Mr Yeager said liquids at Eagle Ford would make up half of production volume - and more than 80 per cent of revenue - with BHP targeting 300,000 barrels of oil equivalent a day within five or six years."
"Mr Yeager said US gas prices had already risen by more than 30 per cent from their bottom. Gas prices had previously fallen below the cash cost of production and operators were pulling out of shale extraction. But he said that longer term, gas was the ''premium, preferred fuel of the future and it will rebound and it will be strong''.
While the Haynesville shale was an unconventional resource, he said it was ''big, fat, juicy unconventional''.
The advent of unconventional gas was a ''revolution'' that would last 50 years and was bigger than the shift from 2D to 3D seismic surveys, or from shallow to deepwater drilling. ''It's the biggest thing in my 33 years in this industry,'' he said.
Mr Yeager was confident that the US would allow exports of LNG to Asia, potentially competing with Australian projects including BHP's Scarborough field."
Read more: http://www.smh.com.au/business/bhp-mans-all-pumps-in-the-us-2012051...
Tags: BHP, Haynesville Shale, Petrohawk, natural gas, unconventional
Views: 924
Replies to This Discussion
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Permalink Reply by Antiqued Rose on -
Premium, preferred...rebound, strong...big, fat, juicy...revolution(ary).
Talk that talk Mr Yeager, hope you're right, and it happens this generation.
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Permalink Reply by jffree1 on
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Too optimistic? Probably, but I think the message was really "yeah, we know gas just sucks as an investment vehicle, right now (after we dumped BILLIONS into acquiring more of it), but the upside is HUGE (somewhere in the future) and our liquids production from Eagle Ford and Permian will more than cover the down side in gas so... don't worry, we got this covered." It's all about keeping the stock price up today.
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Permalink Reply by Antiqued Rose on
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Of course, thanks!
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Permalink Reply by Keith Mauck (Site Publisher) on
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Does this mean that Petrohawk lessees may see uptick in royalty payouts (albeit at a low price)? I guess another way of stating it, is the remainder of the 50% production volume coming from the permian?
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Permalink Reply by Krkyoldhag on
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Not sure what this will mean for drilling in Haynesville but today stock broker recommended Conoco Phillips and Shell Oil one projected to go from 53 to 75 the other from 63 to 80 a share after election.
Have to think about this some more.
What could be on horizon to cause a rise in stock prices like this?
I am staying out of market for now no matter the predictions.
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Permalink Reply by Henry on
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IKrkoldhag,
I wish! I've had COP and RDS for a few of years now. While the dividends are good, I'm not optimistic about those price targets. I just keep holding them....
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Permalink Reply by Krkyoldhag on
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Let me know in a few months if this turns out good for you ...be interesting and a blessing for you. I always have to consider when I get these "suggestions" on my account if they are "making a market" but these two companies don't need that..
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Permalink Reply by Henry on
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Krkyoldhag,
I'm not concerned about how it turns out in a few months. I'm concerned with how it turns out in 10 - 20 years. I'm making about 5% on each of them in dividends right now, and that's good enough for me to be patient. My bet is that at some time in the next 20 years, we'll see a much higher price for oil, and at that point I'll see a much higher stock price. These stocks are my personal hedge against $200 oil. They will make $5/gal gasoline a bit less painful.
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Permalink Reply by Krkyoldhag on
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But I am 74 and don't have the time to wait for that kind of change. You can't blame me for wanting it now..
Well its been an entertainment and a learning experience for me..at this advanced age..to keep up with what is going on in the Shale.
My heirs will enjoy the benefits of the shale some day but sure would like to spend some of it myself.
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Permalink Reply by Max on
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Krkyoldhag, they give credit to old people. Spend like there is no tomorrow and that would insure you a longer life. That's what I do, the Grim Reaper has come several times, but I treat him like all the other bill collectors, I don't answer the door.
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Permalink Reply by GoshDarn on
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Yoda could be wrong, but the iffy algorithm of a less-than-predictable crystal ball kinda sees the price of oil falling and continuing to fall through Nov. It won't be going back up, nor will it be going too low, yet it will be stimulating the economy per a lower margin until 2013.
Well, maybe. Never know when these crystal balls can go haywire.
(Think about it.)
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