8/13/2019 BHP Billiton Investor Briefing - Day 2
1/90
BHP Billiton Limited BHP Billiton Plc171 Collins Street Neathouse PlaceMelbourne Victoria 3000 Australia London SW1V 1BH UKGPO BOX 86 Tel +44 20 7802 4000Melbourne Victoria 3001 Australia Fax + 44 20 7802 4111Tel +61 1300 554 757 Fax +61 3 9609 3015 bhpbilliton.com
bhpbilliton.com
Company Secretariat
10 December 2013
To: Australian Securities Exchange1 cc: New York Stock Exchange
London Stock Exchange JSE Limited
INVESTOR BRIEFING
BHP Billiton President Petroleum and Potash, Tim Cutt, will present at the Companys Petroleum
investor briefing in Houston, USA on Tuesday, 10 December 2013.
When discussing his presentation, Mr Cutt said: Our high quality resource portfolio is concentrated inour core regions of the United States and Australia, where we have a thorough understanding of thegeology and a proven operating track record. Although our resource base could support substantiallyhigher rates of investment, we will focus on value over volume. Our production guidance for the 2014financial year remains unchanged at 250 million barrels of oil equivalent (BHP Billiton share).
Our conventional oil and gas portfolio is the foundation of the Petroleum business and we expect to
maintain steady production in the medium term by focusing on low risk, high return investments inproximity to existing infrastructure. This will include infill drilling at Shenzi, Pyrenees, Atlantis and MadDog where individual wells can deliver investment returns of over 90 per cent.
When discussing BHP Billitons Onshore US business, Mr Cutt said: On the basis of annualinvestment of US$4 billion, liquids production in our shale business will grow to 200 thousand barrelsper day in the 2017 financial year, with total Onshore US production reaching 500 thousand barrels ofoil equivalent per day over the same period. In this scenario, Onshore US is expected to be self-funding in the 2016 financial year before generating almost US$3 billion of free cash flow in the 2020
financial year. As a result, Onshore US is well positioned to become another major cash flowgenerator for BHP Billiton.
Consistent with our strategy, we continue to evaluate and strengthen our acreage position as we seekto extend our liquids production profile. Our evaluation program in the Permian has successfullyidentified a focus area where we are actively pursuing a 100 thousand barrel of oil equivalent per daydevelopment. The investment associated with our overall evaluation of the Permian Basin, which has
8/13/2019 BHP Billiton Investor Briefing - Day 2
2/90
p
Mr Cutt also said that he will continue to simplify the Petroleum portfolio, for value: Future investmentwill be increasingly focused on those same core areas of Australia, the United States and potentially,Trinidad and Tobago. Our disciplined divestment process, which led to the US$1.7 billion sale of ourinterests in Browse, will continue to create substantial value for shareholders.
A copy of the materials to be presented on Tuesday, 10 December 2013 is attached.
Further information on BHP Billiton can be found at:www.bhpbilliton.com
Nicole Duncan
Company SecretaryBHP Billiton Limited
Media Relations
Austral ia
Emily PerryTel: +61 3 9609 2800 Mobile: +61 477 325 803email:[email protected]
Fiona HadleyTel: +61 3 9609 2211 Mobile: +61 427 777 908email:[email protected]
Eleanor NicholsTel: +61 3 9609 2360 Mobile: +61 407 064 748email:[email protected]
United Kingdom
Ruban YogarajahTel: +44 20 7802 4033 Mobile: +44 7827 082 022email:[email protected]
Jennifer WhiteTel: +44 20 7802 7462 Mobile: +44 7827 253 764
Investor Relations
Austral ia
James AgarTel: +61 3 9609 2222 Mobile: +61 467 807 064email:[email protected]
Andrew GunnTel: +61 3 9609 3575 Mobile: +61 402 087 354email:[email protected]
United Kingdom and South Africa
Tara DinesTel: +44 20 7802 7113 Mobile: +44 7825 342 232email:[email protected]
Amer icas
James AgarTel: +61 3 9609 2222 Mobile: +61 467 807 064email:[email protected]
Matt ChismTel: +1 713 599 6158 Mobile: +1 281 782 2238
il M tt E Chi @bh billit
http://www.bhpbilliton.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://c/Documents%20and%20Settings/evans/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/eRoom/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/richd/Local%20Settings/Application%20Data/eRoom/eRoom%20Client/V7/EditingFiles/[email protected]://c/Documents%20and%20Settings/evans/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/eRoom/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/richd/Local%20Settings/Application%20Data/eRoom/eRoom%20Client/V7/EditingFiles/[email protected]://c/Documents%20and%20Settings/evans/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/eRoom/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/richd/Local%20Settings/Application%20Data/eRoom/eRoom%20Client/V7/EditingFiles/[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://c/Documents%20and%20Settings/evans/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/eRoom/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/Application%20Data/richd/Local%20Settings/Application%20Data/eRoom/eRoom%20Client/V7/EditingFiles/[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.bhpbilliton.com/8/13/2019 BHP Billiton Investor Briefing - Day 2
3/90
Focusing on value over volume
Tim Cutt
President, Petroleum and Potash10 December 2013
Pyrenees Western Australia
8/13/2019 BHP Billiton Investor Briefing - Day 2
4/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
5/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
6/90
Key themes
Slide 4
Committed to ongoing improvement in our HSEC performance
A large, high quality resource base concentrated in Australia and the US
Low risk brownfield investment is maximising the value of our Conventional business
Our Shale business is well positioned to generate substantial growth in free cash flow
Our productivity agenda continues to deliver strong results
Our strategy is focused on value over volume
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
7/90
Safety is our priority
Slide 5
Total Recordable Injury Frequency(TRIF, 12 month moving average)
0
2
4
6
8
Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13
Fatality
Shale TRIF
Petroleum TRIF
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
8/90
Our HSEC focus areas
Slide 6
Community
Continue to make a meaningful contribution through social investment andpartnerships
Health
Minimise exposure to silica during hydraulic fracturing operations inour Shale business
Environment
Manage water usage and reduce greenhouse gas emissions
Safety
Leverage systems and technology to manage material risks
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
9/90
An experienced Petroleum management team
Slide 7
President Petroleum and Potash
Tim Cutt
VP Strategy and
Development
Rob Kase
President Exploration
David RaineyAsset President Convent ional
Steve PastorAsset President Shale
Rod Skaufel
VP HSEC
Kristen Ray
VP Human Resource
David Nelson
VP Government and
External AffairsFred Hagemeyer
VP Finance
David PowellVP Drilling
Derek CardnoVP Engineering
Doug Handyside
Senior Manager Planning
and PerformanceMichael Stone
VP Marketing
Brett Langley
VP Group Legal
Justin Stuhldreher
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
10/90
0
2
4
6
8
10
30 June 2008 30 June 2013 30 June 2013
US
Australia
rest of worldgas
liquids
A large, high quality resource portfolio
Slide 8
We have more than doubled our resourcebase and delivered >100% reservereplacement over the past five years
Our business is underpinned by largefields, concentrated in Australia and the US
multiple high return developmentoptions
Our targeted exploration program is
focused on large, high quality oilopportunities primarily within our existingfootprint
BHP Billi ton petroleum resource(billion boe)
30 June 2008 30 June 20131
1. Resource classifications Proved Reserves (1P) 2,563 MMboe, Proved and Probable Reserves (2P) 6,501 MMboe, Contingent Resources (2C) 3,259 MMboe.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
11/90
Australia and the US remain our core regions
Slide 9
Trinidad & Tobago
United Kingdom
PakistanAlgeria
Australia
Onshore US
Gulf of Mexico
Petroleum
other
FY14 BHP Bill iton capital and exploration expenditure
Shale
Australia
Gulf of Mexico
Explorationother
PetroleumBHP Billiton
Bubble size represents resource of one billion barrels of oil equivalent.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
12/90
Australian assets deliver strong, stable cash flow
Slide 10
Bass StraitNorth West Shelf Pyrenees /
Stybarrow
Macedon Petroleum Underlying EBITDA(US$ billion)
0
5
10
FY09 FY10 FY11 FY12 FY13
Petroleum
Australia
Australia
Bubble size represents resource of one billion barrels of oil equivalent.Resource classifications Proved Reserves (1P) 837 MMboe, Proved and Probable Reserves (2P) 1,035 MMboe, Contingent Resources (2C) 1,265 MMboe.
Thebe
Scarborough
Stybarrow
MacedonPyrenees
Macedon
Gas Plant
LNG Plant
Onslow
KarrathaDampier
North West Shelf
Australia
liquids field
Tallaganda
Jupiter
gas field
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
13/90
US assets will underpin substantial growth
Slide 11
Shenzi Atlantis Onshore USMad Dog Neptune
Onshore US
Gulf of Mexico
Bubble size represents resource of one billion barrels of oil equivalent.
Petroleum Underlying EBITDA(US$ billion)
0
5
10
FY09 FY10 FY11 FY12 FY13
Petroleum
US
Onshore US resource classifications Proved Reserves (1P) 1,334 MMboe, Proved andProbable Reserves (2P) 4,894 MMboe, Contingent Resources (2C) 1,547 MMboe.
Gulf of Mexico resource classifications Proved Reserves (1P) 284 MMboe, Proved andProbable Reserves (2P) 424 MMboe, Contingent Resources (2C) 327 MMboe.
New Mexico
Texas
Oklahoma
Arkansas
Louisiana
Mississippi
Haynesville
Fayetteville
Eagle Ford
Permian
Houston
Shenzi
AtlantisMad Dog
Neptune
liquids focused area
gas focused area
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
14/90
Conventional investment profile
Slide 12
Conventional life cycle driven by few but
significant front end investment decisions
development plan is established upfront for the full life cycle of the field
early technology decisions have
significant value implications
The majority of capital invested prior tofirst production
Large tranche of initial production
followed by limited additions
Production and free cash flow peak inearly years post start up
(400)
(300)
(200)
(100)
-
100
200
300
400
0 2 4 6 8 10 12 14 16 18 20
EBITDA
capital
free cash flow
Representative investment profile
(US$ million)
0
50
100
150
200
250
300
0 2 4 6 8 10 12 14 16 18 20
nearfield tie-ins
infill drilling
initial project
Representative production profile(MMboe)
OperationsOperationsExecutionExecutionEngineeringEngineeringAppraisalAppraisalExplorationExplorationBrownfield
projects
Brownfield
projects
Representative investment and production profiles are for illustrative purposesonly and do not reflect actual BHP Billiton estimates or operations.
years
years
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
15/90
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
0 2 4 6 8 10 12 14 16 18 20
Shale investment profile
Slide 13
Shale life cycle driven by continuous
investment decisions and optimisationopportunities
thousands of potential well locations,each reflecting a discrete opportunity
Significant portion of annual capital offsetby early revenue generation
Flexibility to adjust development plans inresponse to market conditions
Multiple opportunities to add materialvalue over the long term
Progressive development delivers steadygrowth in production and free cash flowover many years
(30)
(20)
(10)
-
10
20
30
40
50
60
0 2 4 6 8 10 12 14 16 18 20
EBITDA
capital
free cash flow
Representative investment profile
(US$ million)
Representative production profile(MMboe)
Area speci fic
tests
Area speci fic
testsAppraisalAppraisal
Mapping and
Leasing
Mapping and
LeasingExplorationExploration Full developmentFull development
years
yearsRepresentative investment and production profiles are for illustrative purposesonly and do not reflect actual BHP Billiton estimates or operations.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
16/90
0
5
10
15
20
25
30
0 100 200 300 400 500
BHP Billiton
near term focus
BHP Billiton
long term valuecreation
BHP Billiton
development
options must
compete within
the portfolio
A clear focus on value over volume
Slide 14
We will prioritise the highest returninvestment opportunity
investment in our shale liquidsacreage (tight oil) generates strong
returns
deepwater infill drilling and brownfieldexpansions will maximise the value ofour Conventional business
preserving the value of our dry gasshale acreage
We will continue to simplify the portfoliofor value
interest in Browse divested for
US$1.7 billion in FY13
Liverpool Bay divestment announcedin October 2013
Source: Wood Mackenzie.
Greenfield project IRR(%, IRR)
Oil sands Greenfield
LNG
Shale gas Conventional
Tight oil
Deepwater
Capital investment in greenfield projects 2006-2020
(US$ billion)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
17/90
FY14 production guidance maintained
Slide 15
On track to produce 250 MMboe in FY14
75% increase in shale liquids production
stable Conventional volumes as Macedonand Atlantis offset natural field decline andplanned maintenance
Production for the December 2013 quarter isexpected to decline to approximately 58 MMboe
Bass Strait seasonal demand
Pyrenees scheduled maintenance
Eagle Ford planned facility tie-in activities
well remediation and weather relateddowntime at Hawkville
partially offset by strong Atlantis performance
0
100
200
300
FY09 FY10 FY11 FY12 FY13 FY14e
Conventional
Shale gas
Shale liquids
Strong growth in Shale liquids product ion(Petroleum production, MMboe)
1. Includes a full year of production from Liverpool Bay (UK), which is the subject of an announced, ongoing divestment process. Production guidance will be updated pendingsuccessful transaction close expected in H2 FY14.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
18/90
Leveraging the infrastructure of our
Conventional business
Slide 16
Capital expenditure of ~US$1.5 billion perannum is expected to maintain Conventionalvolumes for three to five years
high return infill drilling at Shenzi,
Pyrenees, Atlantis and Mad Dog
completion of field extension projects atBass Strait and North West Shelf
FY14 Conventional production outlook(MMboe)
100
120
140
FY13
Base
dec
line
Mac
edon
Atlanti
sinfill
Pyrenee
sinfill
Nort
hRan
kin2
other
F
Y14e
Capital spend
(BHP Billiton share)
IRR1
Shenzi infill well US$62 million >90%
Atlantis infill well US$91 million >100%
Pyrenees 3 well
subsea tie-back2
US$218 million ~20%
FY14 Conventional infill drilling returns
1. After tax, based on September 2013 futures prices.2. Includes additional subsea manifolds and flowlines.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
19/90
Development options must compete for capital
Slide 17
We own significant contingent resourceswithin our core areas
Scarborough (ExxonMobil operated,BHP Billiton share 50%) is an ~8 tcf1
(100% basis) gas resource
Mad Dog (BP operated, BHP Billitonshare 23.9%) is among the largest oilfields in the Gulf of Mexico
Both projects are under evaluation with a firmfocus on improving capital efficiency
We will pursue the path that maximisesshareholder value
Mad Dog field Gulf of Mexico
Scarborough / Thebe Western Australia
North
East
West
Phase 2
Mad Dog p latform
1. Resources on a 2C basis.
Thebe
Scarborough
Stybarrow
MacedonPyrenees
Macedon
Gas Plant
LNG Plant
Onslow
KarrathaDampier
North West Shelf
Australia
liquids field
Tallaganda
Jupiter
gas field
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
20/90
Shale development plan will be continually
optimised for value
Slide 18
We are prioritising investment in the liquidsrich, high return shale assets
pursuing accelerated development in theprolific Black Hawk area of the Eagle Ford
timing Hawkville development for liquidscontent and lease retention
large scale development of the Permianwill extend our liquids production profile
We are preserving the value of our dry gasshale assets
current drilling in the Haynesville delivers30%1 rates of return
Fayetteville investment limited to strongnon-operated opportunities with 25%1
rates of return
We have flexibility in our Shale portfolio to timeinvestment for maximum value
BHP Bil liton Onshore US shale plays
1. After tax, based on September 2013 futures prices.
Houston
liquids focused area
dry gas focused area
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
21/90
Positioned to deliver substantial growth in free
cash flow
Slide 19
Our Shale business must compete forcapital within the broader BHP Billitonportfolio
annual budgets will be subject to
ongoing review
A capital expenditure program ofUS$4 billion per annum will support stronggrowth in liquids production
forecast ~200 kb/d of liquids by FY17from the Eagle Ford and Permian
growth in gas production reflectsassociated gas from our liquids richareas
Free cash flow from our Shale business isexpected to be positive by FY16 and toapproach US$3 billion per annum by theend of the decade
0
150
300
450
600
FY12 FY13 FY14e FY15e FY16e FY17e FY18e
crude & condensate NGL associated gas dry gas
Onshore US production scenario(kboe/d)
(5)
0
5
10
FY12 FY13 FY14e FY15e FY16e FY17e FY18e
EBITDA capital free cash flow
Onshore US free cash f low scenario1
(US$ billion, pre-tax cash flow)
1. Forward projections are based on current development plans and September 2013 futures prices. Outlook will continue to be adjusted in response to market conditions, newopportunities and BHP Billiton Group capital prioritisation.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
22/90
Extending our high return l iquids profi le
Slide 20
Efforts underway to expand our Permianland position in our core focus area
100,000 net acres1 in this focus area
acquiring additional acreage in highlyprospective areas with a view toconsolidating our position within ourfocus area
testing multiple productive horizons
First shale exploration well drilled inOctober 2013 in the emerging Pearsall play
successfully accessed 30,000 netacres1 and an option for an additional70,000 net acres2, all contiguous
evaluation ongoing to determineliquids production potential
Pearsall 100,000 net acres
Permian focus area 100,000 net acres
Black Hawk 58,000 net acres
PearsallFocus
area
Houston
liquids focused area
dry gas focused area
1. As at 30 June 2013.2. As at 31 October 2013.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
23/90
We have flexibility to adjust our plans
Slide 21
Development of our existing liquids acreagedominates our investment program
infrastructure component will declineas build out in the Eagle Ford is largely
completed in the near term
Near term dry gas investments yieldattractive returns, however they can bedeferred without loss of value
We have significant flexibility to adjustour plans
extend liquids program with explorationsuccess and/or acreage optimisation
ramp up dry gas development asmarket conditions improve
0
1
2
3
4
5
FY11 FY12 FY13 FY14e FY15e FY16e FY17e FY18e
liquids liquids expansion or dry gas ramp up dry gas
Onshore US capital expenditure scenario(US$ billion)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
24/90
Our productivity agenda continues to deliver
strong results
Slide 22
Repetitive, manufacturing nature of shale isideally suited to our productivity agenda
reduce drilling costs per well throughefficiency and supply chain
management increase ultimate recovery per well
through completions optimisation(eg. well spacing and frac design)
accelerate spud to sales timing
(eg. simultaneous operations and paddrilling optimisation)
These low cost initiatives have the potentialto unlock substantial value
Improving well EUR2 through completion optimisation(% improvement in cumulative production)
1. For 3-string well design.2. Estimated ultimate recovery.
BHP Billi ton Black Hawk drilling cost performance1
(index, Q1 FY13 = 100, US$ million)
40
60
80
100
Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Oct-13
0
20
40
60
0 10 20 30 40 50 60
individual well
(days)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
25/90
Strong outlook with growth prioritised for value
Slide 23
0
100
200
300
400
FY09 FY10 FY11 FY12 FY13 FY14e FY15e FY16e FY17e FY18e
Conventional
Onshore US
Petroleum production scenario1
(MMboe)
1. Forward projections are based on existing acreage, current development plans and September 2013 futures prices. Outlook will continue to be adjusted in response to marketconditions, new opportunities and BHP Billiton Group capital prioritisation.
2. Includes a full year of production from Liverpool Bay (UK), which is the subject of an announced, ongoing divestment process. Production guidance will be updated pendingsuccessful transaction close expected in H2 FY14.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
26/90
Key themes
Slide 24
Committed to ongoing improvement in our HSEC performance
A large, high quality resource base concentrated in Australia and the US
Low risk brownfield investment is maximising the value of our Conventional business
Our Shale business is well positioned to generate substantial growth in free cash flow
Our productivity agenda continues to deliver strong results
Our strategy is focused on value over volume
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
27/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
28/90
A major earnings
contributorDavid Powell
Vice President, Finance10 December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
29/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
30/90
Product mix a key driver of Onshore US revenue
Slide 28
Decisive response to market conditionsunderpins significant growth in Onshore USliquids production
liquids contributed ~20% of Onshore US
production and ~45% of revenue in FY13 75% increase in liquids production
anticipated in FY14
Our Onshore US crude and condensate sales
currently achieve ~94% of WTI1
Our current average realised Onshore USNGL price represents ~32% of WTI1
We achieve ~95% of the Henry Hub gas price
due to location differentials
Source: WTI, NYMEX; NGL prices reflect the Mt Belvieu indices for our Onshore US production.1. Onshore US realised prices based on FY14 YTD as at 31 October 2013.
0
25
50
75
100
0
30
60
90
120
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13
NGL price as a % of WTI WTI
US NGL prices have diverged from oil(WTI, US$/bbl) (NGL price as % of WTI)
0
20
40
60
0
20
40
60
FY12 FY13 FY14e
NGL
crude and condensateliquids revenue contribution
Onshore US liquids contribut ion(% of total Onshore US production) (% of total revenue)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
31/90
40
50
60
70
80
0
5
10
15
20
FY12 FY13 FY14e FY15e FY16e FY17e FY18e
production cash cost transportationproduction taxes and other non-recurringEBITDA margin
Seeking to improve our low cost position
Slide 29
Petroleum costs(US$/boe)
Shale all in cash costs2
(US$/boe) (%)
Low cost conventional operations underpinexceptional margins
Our decision to prioritise shale liquidsdevelopment has increased margins albeit
with an increase in average production costs
costs expected to decline in the mediumterm with the addition of infrastructure
Our near term liquids focus has resulted in a
series of non-recurring charges
rig termination costs of ~US$100 millionin FY14 associated with the optimisationof our dry gas program (majorityincurred in H1)
underutilised legacy gas pipelinecommitments will incur charges of~US$170 million per annum in FY14and FY15, primarily in the Haynesville
1. Production cash cost includes lifting, maintenance and overheads.2. All in cash cost is Revenue (excluding third party) minus Underlying EBITDA, adjusted for exploration and embedded derivatives.3. Shale non-recurring costs include charges associated with the termination of rig contracts, underutilised gas pipeline commitments and system conversion costs.
0
5
10
15
20
FY09 FY10 FY11 FY12 FY13 FY14e FY15e
production cash cost all in cash cost
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
32/90
Timing of reserve additions impacts depreciation
Slide 30
Conventional unit depreciation remainshighly competitive
minor variations reflect project start-upsand timing of resource additions
Our successful Permian evaluation programhas near term depreciation implications
we will incur ~US$600 million indepreciation charges in FY14 on
4 MMboe of Permian production Permian depreciation rate is expected to
normalise as production ramps up andreserves are booked
Shale depreciation(US$ billion)
Depreciation(US$/boe)
0
5
10
15
20
25
FY09 FY10 FY11 FY12 FY13 FY14e FY15e
Petroleum Conventional Shale
0
5
10
15
20
25
0
1
2
3
4
5
FY12 FY13 FY14e FY15e FY16e FY17e FY18e
Shale other Permian unit depreciation
(US$/boe)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
33/90
A compelling long term outlook for Onshore US
Slide 31
Onshore US margin scenario1
(%)
(20)
0
20
40
60
80
FY13 FY14e FY15e FY16e FY17e FY18e
EBITDA margin
EBIT margin
1. Forward projections are based on current development plans and September 2013 futures prices. Outlook will continue to be adjusted in response to market conditions, newopportunities and BHP Billiton Group capital prioritisation.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
34/90
Understanding the US fiscal regime
Slide 32
The fiscal regime in the US is aimed atencouraging development of oil and gasresources
US tax code allows for immediate deduction
of intangible drilling and development costs(IDC) deferring cash tax
contributes to carry forward tax NetOperating Losses
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
35/90
A high return investment program
Slide 33
Petroleum offers some of the highest returninvestment opportunities for the Group
Capital and exploration expenditure of~US$6.2 billion is planned for Petroleum in FY14
>75% of our US$3.9 billion budget forOnshore US will be invested in our liquidsrich acreage
Conventional spend of ~US$1.7 billion
focused on high return infill drilling and fieldextension projects
US$600 million exploration budget will targethigh quality oil opportunities
Capital and exploration expenditure(US$ billion)
0
5
10
15
20
25
FY09 FY10 FY11 FY12 FY13 FY14e
Petroleum BHP Billiton
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
36/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
37/90
Maximising the value of our
Conventional businessSteve Pastor
Asset President, Conventional10 December 2013
Trinidad
8/13/2019 BHP Billiton Investor Briefing - Day 2
38/90
Key themes
Slide 36
Operating excellence and highly profitable assets provide a strong foundation for ourPetroleum business
Low-risk, high return infill drilling and brownfield expansions will extend our
production profile
Demonstrated technical capability to deliver projects on budget and schedule
We are evaluating long term investment opportunities and will pursue the path thatmaximises shareholder value
We will continue to simplify our portfolio
Our conventional assets will continue to deliver strong, stable free cash flow
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
39/90
A strong foundation for our Petroleum business
Slide 37
Note: Conventional volumes, BHP Billiton share. Based on FY14 forecast production. Size of bubbles scaled to production rates.
Austral ia operated50 kboe/d
Trinidad & Tobago19 kboe/d
gas
crude & condensate
LNG
NGL
Gulf of Mexico87 kboe/d
North West Shelf75 kboe/d
Bass Strait96 kboe/d
International other46 kboe/d
0
5
10
FY09 FY10 FY11 FY12 FY13
Petroleum
Conventional
Petroleum Underlying EBITDA(US$ billion)
Conventional production outlook(FY14, BHP Billiton share)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
40/90
Highly profitable Conventional business
Slide 38
Australia and the Gulf of Mexico are our coreregions with valuable infrastructure positions
Conventional volumes have remained steady
~50% crude, condensate and NGL ~50% natural gas
Liquids contributed ~70% of revenue inFY13, underpinning exceptional EBIT
margins
Our Conventional business continues todeliver strong, stable free cash flow
Production volume(Conventional, MMboe) (%)
Underlying EBIT(US$ billion) (%)
45
50
55
60
65
0
2
4
6
8
FY09 FY10 FY11 FY12 FY13
EBIT EBIT margin
0
20
40
60
80
0
50
100
150
200
FY09 FY10 FY11 FY12 FY13
liquids gas % revenue liquids
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
41/90
Maximising value through operational excellence
Slide 39
We are an industry leader in deepwaterdrilling capability and operational uptime
our drilling times are well below industryaverage
we were the first operator to resumeproduction drilling in the Gulf of Mexicopost Macondo
average operated facility uptime ~95%
We are applying technology to increase valueand identify additional resources
4D seismic technology and reservoirsimulation to identify infill opportunities
water injection to maximise recovery
Average dr ill time per 1,000 ft(Deepwater Gulf of Mexico, subsalt, days)
Macedon
FY13 facility upt ime
0
2
4
6
8
pre-moratorium post-moratorium
others BHP Billiton
Source: Average drill time per 1,000 ft, Rushmore Associates The Rushmore Reviews, Scout Tickets and BHP Billiton analysis as at 14 November 2013.1. Operated by others.
80%
90%
100%
OBO
Stybarrow
Pyrenees
Shenz
i
Nep
tune
Angos
tura
Zamzama
Minerva
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
42/90
Strong track record of project delivery
Slide 40
Demonstrated ability to deliver our projectson budget and schedule
Six major operated projects completed onschedule and budget in the last six years
two deepwater Tension Leg Platforms(TLP) in the GoM, Shenzi and Neptune
two Floating Production Storage andOfftake (FPSO) vessels in Western
Australia, Stybarrow and Pyrenees Angostura Phase 2 gas project in
Trinidad
Macedon gas development in WesternAustralia (FY14 start-up)
These projects contributed >35% ofPetroleums FY13 Underlying EBIT
NeptuneShenzi
Macedon
PyreneesStybarrow
Angostura
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
43/90
Operator BHP BillitonResources1
130 MMboeWorking interest 44%
First production date 2009
FY13 net production 17 MMboe
0
50
100
150
Mar 09 Dec 09 Sep 10 Jun 11 Mar 12 Dec 12 Sep 13
first production infill production
Shenzi our premier operated facility
Slide 41
High quality reservoir over 400 feet thick in theGulf of Mexico
Excellent operating performance, ~95% uptimesince start-up
High return infill drilling campaign continues toextend the production profile
Two new infill wells in FY14 will maintain nearterm production at nameplate capacity
Valuable incremental investment opportunitiesare under evaluation
additional infill and water injection wells
exploration to the north of the field
1. 2P+2C remaining resource as at 30 June 2013, BHP Billiton share.
Shenzi production(kboe/d, 100% basis)
Shenzi field map
facility nameplate capacity
P169%
P221%
2C10%
East
North
West
Shenzi platform
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
44/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
45/90
North
EastWest
Phase 2
Mad Dog release of high margin latent capacity
Slide 43
Mad Dog is among the largest oil fields in theGulf of Mexico
Mad Dog Phase 1 rig lost during Hurricane Ike in2008 has been replaced and is now operational
Additional scheduled downtime during FY14 isexpected to reduce year on year production
Infill drilling is expected to increase Phase 1production in FY15, with rates approachingfacility capacity by FY18
Substantial resource potential for Phase 2development of South and West areas Mad Dog production
(kboe/d, 100% basis)
1. Includes Mad Dog Phase 2 resource. 2P+2C remaining resource as at 30 June 2013, BHP Billiton share.
Mad Dog field map
Mad Dog p latform
0
20
40
60
80
Jan 05 Mar 07 May 09 Jul 11 Sep 13
first production infill production
facility nameplate capacity
Operator BPResources1
266 MMboeWorking interest 23.9%
First production date 2005
FY13 net production 3 MMboe
P121%
P26%
2C73%
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
46/90
0
50
100
150
Nov 07 Oct 08 Sep 09 Aug 10 Jul 11 Jun 12 May 13
Stybarrow and Pyrenees Macedon
WA operated valuable infrastructure position
Slide 44
Significant resource and valuable infrastructureposition underpins our operated assets in this area
Macedon gas project now online, expected tocontribute 6 MMboe (BHP Billiton share) in FY14
Multi well extension program at Pyreneesexpected to deliver additional 20 kboe/d (100%basis) in H2 FY14
Significant exploration acreage under permit
Leveraging existing infrastructure unlocks potentialfor additional high return opportunities
1. 2P+2C remaining resource as at 30 June 2013, BHP Billiton share.2. First production from the Stybarrow field.
Western Australia operated production(kboe/d, 100% basis)
Macedonstart-up
Western Australia operated assets
Operator BHP BillitonResources1
170 MMboe
First production date 2007
FY13 net production 14 MMboe
P150%
P226%
2C24%
Stybarrow
Macedon
Pyrenees
Macedon
Gas Plant
Onslow
Tallaganda
Australia
liquids field
gas field
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
B S i l C i l
8/13/2019 BHP Billiton Investor Briefing - Day 2
47/90
Bass Strait our largest Conventional asset
Slide 45
Delivered first production more than 40 years ago
Project execution challenges at Turrum and Kipperresulted in revisions to original budget and schedule
Longford gas conditioning plant on budget and
schedule with start-up CY16; Kipper mercuryremoval anticipated start-up CY16
Turrum and Kipper will deliver valuable additionalwet gas partially offsetting liquids decline
Eastern Australia gas prices expected to strengthenwith new LNG demand and rising costs of supply
Assessing additional opportunities to extend gasplateau production through 2030 and beyond
1. 2P+2C remaining resource as at 30 June 2013, BHP Billiton share.
0
100
200
300
400
2001 2003 2005 2007 2009 2011 2013
liquids gas
Bass Strait product ion(kboe/d, 100% basis)
Bass Strait assets
Operator EssoResources1
664 MMboeWorking interest 50%
First production date 1969
FY13 net production 36 MMboe
P158%
P220%
2C22%
BHP Billiton Investor briefing: Petroleum, December 2013
N th W t Sh lf j A i LNG li
8/13/2019 BHP Billiton Investor Briefing - Day 2
48/90
North West Shelf a major Asian LNG supplier
Slide 46
NWS has five LNG trains with capacity of 16 mtpa
Major projects will extend the production profile
North Rankin 2 online October 2013 onschedule and budget
Greater Western Flank A (GWF-A) onschedule and budget, start-up CY16
Additional projects under evaluation includingGWF-B and Persephone
NWS joint venture is assessing opportunities toprocess third party gas to maximise value fromestablished infrastructure
1. 2P+2C remaining resource as at 30 June 2013, BHP Billiton share.
0
200
400
600
2001 2003 2005 2007 2009 2011 2013
liquids gas LNG
NWS production(kboe/d, 100% basis)
NWS assets
Operator WoodsideResources1
483 MMboeWorking interest 14.85%
First production date 1984
FY13 net production 30 MMboe
P174%
P23%
2C23%
BHP Billiton Investor briefing: Petroleum, December 2013
International assets Trinidad has significant
8/13/2019 BHP Billiton Investor Briefing - Day 2
49/90
0
10
20
30
40
FY09 FY10 FY11 FY12 FY13
Trinidad Pakistan Algeria UK
Production from International operations(MMboe, BHP Billiton share)
International assets Trinidad has significant
potential
Slide 47
Trinidad has the potential to become a third coreregion for our Petroleum business
plans to extend production plateau atAngostura
exploration focused on highly prospectivedeepwater acreage
Non-operated ROD asset in Algeria contributessubstantial cash flow
We continue to achieve excellent performanceand uptime at our operated Zamzama asset inPakistan
We have announced the divestment of our UK
Liverpool Bay asset
Trinidad
BHP Billiton Investor briefing: Petroleum, December 2013
All i t t t t f it l
8/13/2019 BHP Billiton Investor Briefing - Day 2
50/90
Scarborough ~8 tcf1 (100% basis)
BHP Billiton 50%, ExxonMobil operator
good quality reservoir, lean gas
delineated field with five appraisal wells currently in Identification phase
Thebe discovery ~1 tcf1 (100% basis)
BHP Billiton 100% and operator
delineated with four well penetrations
Working with ExxonMobil to optimisedevelopment concepts
We will pursue the path that maximisesvalue for shareholders
All investments must compete for capital
Slide 48
Scarborough / Thebe Western Australia
1. Resources on a 2C basis.
Thebe
Scarborough
Stybarrow
MacedonPyrenees
MacedonGas Plant
LNG Plant
Onslow
KarrathaDampier
North West Shelf
Australia
liquids field
Tallaganda
Jupiter
gas field
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
F th t iti i th G lf f M i
8/13/2019 BHP Billiton Investor Briefing - Day 2
51/90
Further opportunities in the Gulf of Mexico
Slide 49
Mad Dog Phase 2 has potential to deliverhigh rates of return
we are assessing development conceptswith the operator
Stampede (formerly Knotty Head) is 30 milesnorth west of Mad Dog
BHP Billiton 20%, Hess operated
continuing to assess options for this field
Gulf of Mexico assets
BHP Billiton acreage
BHP Billiton Investor briefing: Petroleum, December 2013
W ill i li f th tf li f l
8/13/2019 BHP Billiton Investor Briefing - Day 2
52/90
We will simplify the portfolio for value
Slide 50
Six assets contributed >90% of PetroleumUnderlying EBIT in FY13
Recent divestments highlight our ability tocreate substantial value
interest in Browse divested forUS$1.7 billion in FY13
Liverpool Bay divestment announced inFY14
We will continue to simplify the portfolio witha firm focus on value
1. Excludes exploration and unallocated overheads.
Contribution from the core regions(Underlying EBIT,% of Conventional total1)
0
20
40
60
80
100
FY09 FY10 FY11 FY12 FY13
Gulf of Mexico Australia rest of world
BHP Billiton Investor briefing: Petroleum, December 2013
K th
8/13/2019 BHP Billiton Investor Briefing - Day 2
53/90
Key themes
Slide 51
Operating excellence and highly profitable assets provide a strong foundation for ourPetroleum business
Low-risk, high return infill drilling and brownfield expansions will extend our
production profile
Demonstrated technical capability to deliver projects on budget and schedule
We are evaluating long term investment opportunities and will pursue the path thatmaximises shareholder value
We will continue to simplify our portfolio
Our conventional assets will continue to deliver strong, stable free cash flow
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
54/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
55/90
A disciplined focus on Tier 1
oil opportunitiesDavid Rainey
President, Exploration10 December 2013
Asset name here
Key themes
8/13/2019 BHP Billiton Investor Briefing - Day 2
56/90
Key themes
Slide 54
We are targeting large, high quality oil opportunities, primarily within our existingoperated footprint
Exploration for conventional and shale resources require a deep understanding of
regional geology and petroleum systems
Our conventional program continues to focus on high impact deepwater drilling in theGulf of Mexico and Western Australia
We have built a material position in deepwater Trinidad and Tobago that could underpina future core area
Our shale exploration activity is aimed at extending our high return liquids profile in the
Gulf Coast and Permian Basins
BHP Billiton Investor briefing: Petroleum, December 2013
Focused conventional exploration program
8/13/2019 BHP Billiton Investor Briefing - Day 2
57/90
Focused conventional exploration program
Slide 55
Gulf of Mexico
Progress best Miocene opportunities
Evaluate other Gulf of Mexico plays forTier 1 potential ahead of lease turnover
Gulf of Mexico
Progress best Miocene opportunities
Evaluate other Gulf of Mexico plays forTier 1 potential ahead of lease turnover
Western Australia
Drill Bunyip exploration well
Evaluate and test near field opportunities
Complete regional geology study,
targeting large oil plays
Western Australia
Drill Bunyip exploration well
Evaluate and test near field opportunities
Complete regional geology study,
targeting large oil plays
Trinidad and Tobago
Commence seismic program2
Plan for CY16 drilling
Trinidad and Tobago
Commence seismic program2
Plan for CY16 drilling
South Africa
Process seismic1 anddetermine Tier 1 potential
South Africa
Process seismic1 anddetermine Tier 1 potential
Tier 1 exploration cr iteria
World class source rock
Big reservoir system
Large traps
Acceptable fiscal terms
Early mover
Core area
Evaluating
Southeast Asia
Evaluate current acreagefor Tier 1 potential
Southeast Asia
Evaluate current acreagefor Tier 1 potential
1. In FY13, BHP Billiton acquired 10,075 sq km 3D seismic in Block 3B/4B.2. Trinidad and Tobago and Brazil seismic programs currently in planning phase.
Brazil Plan for seismic in FY162Brazil Plan for seismic in FY162
BHP Billiton Investor briefing: Petroleum, December 2013
We have built a material position in
8/13/2019 BHP Billiton Investor Briefing - Day 2
58/90
Shenzi
Mad Dog
At lantis
*sizes are to scale
50 km
Trinidad
Tobago
Angostura
Leads
BHP Billiton blocks
p
Trinidad and Tobago
Slide 56
We have an established operational presencein Trinidad and Tobago with our shallow water
Angostura asset
The deepwater is largely untested and has
Tier 1 oil potential
world class source rock
giant Orinoco River system
large traps
acceptable fiscal terms
Over the past year we have built a materialearly mover position in deepwater Trinidadand Tobago
We are commencing a major 17,000 squarekilometre seismic acquisition program in FY14
Large footprints
Pegleg lead
BHP Billiton Investor briefing: Petroleum, December 2013
Extending our high return shale liquids profile
8/13/2019 BHP Billiton Investor Briefing - Day 2
59/90
Extending our high return shale liquids profile
Slide 57
Our priority is to delineate the liquidsweet spots in the Gulf Coast andPermian Basins to guide acreageoptimisation
Pearsall exploration well drilled inOctober 2013 targeting horizonbelow the Eagle Ford shale
Continuing to assess other NorthAmerican shale plays for possibleliquids potential
We are building our understandingof the global endowment of shaleresources
Total industry wells drilled since 2001
Permian
Eagle Ford
Fayetteville
Haynesville
Source: IHS Global Inc.
BHP Billiton Investor briefing: Petroleum, December 2013
Key themes
8/13/2019 BHP Billiton Investor Briefing - Day 2
60/90
Key themes
Slide 58
We are targeting large, high quality oil opportunities, primarily within our existingoperated footprint
Exploration for conventional and shale resources require a deep understanding of
regional geology and petroleum systems
Our conventional program continues to focus on high impact deepwater drilling in theGulf of Mexico and Western Australia
We have built a material position in deepwater Trinidad and Tobago that could underpina future core area
Our shale exploration activity is aimed at extending our high return liquids profile in the
Gulf Coast and Permian Basins
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
61/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
62/90
Extending our high return,
shale liquids profileRod Skaufel
Asset President, Shale10 December 2013
Eagle Ford Texas
Key themes
8/13/2019 BHP Billiton Investor Briefing - Day 2
63/90
Key themes
Slide 61
Large, high quality resource position across multiple fields
We have successfully refocused drilling activity on our liquids rich acreage
Progressing development in the liquids rich Permian
We are evaluating options to extend our liquids profile
Defer dry gas opportunities without loss of value
We will continue to optimise our investment program for value
Pursuing significant productivity opportunities targeting cost and resource recovery
BHP Billiton Investor briefing: Petroleum, December 2013
Significant presence in premier US shale plays
8/13/2019 BHP Billiton Investor Briefing - Day 2
64/90
Significant presence in premier US shale plays
Slide 62
We hold 1.5 million net acres1 across fourhighly productive US shale plays and threeUS states
Black Hawk (Eagle Ford) condensate
rich Hawkville (Eagle Ford) mix of
condensate and gas with NGL
Permian liquids rich but geologicallycomplex
Haynesville prolific dry gas wells withpremier acreage position
Fayetteville long term, low technicalrisk, dry gas option
BHP Bil liton Onshore US shale plays
Houston
liquids focused area
dry gas focused area
1. As at 30 June 2013.
BHP Billiton Investor briefing: Petroleum, December 2013
A high quality shale resource portfolio
8/13/2019 BHP Billiton Investor Briefing - Day 2
65/90
A high quality shale resource portfolio
Slide 63
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Haw
kv
ille
Perm
ian
Blac
kHaw
k
Haynesv
ille
Faye
ttev
ille
Contingent Resources (2C)
Probable Reserves
Proved Reserves
Onshore US resources by category(as at 30 June 2013, net, billion boe)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Haw
kv
ille
Perm
ian
Blac
kHaw
k
Haynesv
ille
Faye
ttev
ille
liquids
gas
Onshore US resources by product(as at 30 June 2013, net, billion boe)
BHP Billiton Investor briefing: Petroleum, December 2013
Dry gas acreage is largely Held by Production
8/13/2019 BHP Billiton Investor Briefing - Day 2
66/90
Dry gas acreage is largely Held by Production
Slide 64
In the Haynesville and Fayetteville, leasescomprise regulatory unit size of 640 acres,generally one square mile
Lease terms range from approximately three
to seven years
Acreage is retained provided production isestablished within the term of the lease andcontinues in economic quantities i.e. Held byProduction (HBP)
Limited obligation drilling remaining in ourHaynesville and Fayetteville acreage,providing flexibility to time investment for value
Similar lease arrangements exist in the BlackHawk area of the Eagle Ford
well drilled
future well option released acreage
held acreage
Lease acreagewithin the unit is
retained onceproduction isestablished i.e.
Held byProduction (HBP)
Example: multiple leases within a 640 acre unit heldonce production established within terms of the leases
Otheroperator
Acreage is lost ifunit production isnot established
within the terms ofthe leasesOther
operator
BHP Billiton Investor briefing: Petroleum, December 2013
Hawkville has continuous drill ing obligations
8/13/2019 BHP Billiton Investor Briefing - Day 2
67/90
Hawkville has continuous drill ing obligations
Slide 65
Hawkville is characterised by irregular leaseswith boundaries often defined by the largeranches held by private landowners
Portions of the lease are earned through
drilling with time dependent requirementsi.e. Continuous Drilling Obligations
If continuous drilling obligations are allowedto lapse, acreage that has not been earned islost unless an extension can be secured fromthe landowner
Ongoing evaluation undertaken to ensure thatretained acreage meets economic criteria
Similar leasing arrangements in Permian
First well retains320 acres aroundthe well, creating
the option forfuture drilling in the
retained area
Second well mustbe drilled within six
months of the firstwell, retaining
another 320 acres
If the six monthcontinuous drilling
requirement is notmet, all unearned
acreage at thattime is released
Example1: Large, irregular leases with continuous,time dependent drilling obligations for retention
well drilled
future well option released acreage
held acreage
1. Actual acres retained and time available for subsequent drilling can vary by lease;320 acres and six months is representative but not standard.
BHP Billiton Investor briefing: Petroleum, December 2013
Rigs re-focused to liquids development
8/13/2019 BHP Billiton Investor Briefing - Day 2
68/90
Rigs re focused to liquids development
Slide 66
0
10
20
30
40
50
0
20
40
60
80
100
Sep
11
Oc
t11
Nov
11
Dec
11
Jan
12
Fe
b12
Mar
12
Apr
12
May
12
Jun
12
Ju
l12
Aug
12
Sep
12
Oc
t12
Nov
12
Dec
12
Jan
13
Fe
b13
Mar
13
Apr
13
May
13
Jun
13
Ju
l13
Aug
13
Sep
13
Oc
t13
Black Hawk Hawkville Permian Haynesville Fayetteville rig count
Onshore US operated rigs(% rig split) (average number of gross operated drill rigs)
BHP Billiton Investor briefing: Petroleum, December 2013
Delivering strong growth in high value liquids
d i
8/13/2019 BHP Billiton Investor Briefing - Day 2
69/90
production
Slide 67
0
10
20
30
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Black Hawk Hawkville
Permian Haynesville
Fayetteville
Onshore US production by area(MMboe)
0
10
20
30
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
liquids
gas
Onshore US production by product(MMboe)
BHP Billiton Investor briefing: Petroleum, December 2013
We are among the largest producers in the
E l F d
8/13/2019 BHP Billiton Investor Briefing - Day 2
70/90
Eagle Ford
Slide 68
Eagle Ford is now the largest producingfield within our Petroleum portfolio
currently producing in excess of100 kboe/d (BHP Billiton share)
approximately 60% liquids
Potential to build production above200 kboe/d by FY16 based on currentdevelopment plans
0
25
50
75
100
125
2007 2008 2009 2010 2011 2012 2013e
Eagle Ford product ion by operator(net, kboe/d)
BHP Billiton1
Source: Wood Mackenzie Q3 2013; BHP Billiton analysis.1. Includes legacy Petrohawk.
other operators
BHP Billiton Investor briefing: Petroleum, December 2013
We hold a premier position in the Eagle Ford
8/13/2019 BHP Billiton Investor Briefing - Day 2
71/90
We hold a premier position in the Eagle Ford
Slide 69
Black Hawk (58k net acres1) in theheart of the condensate window
Hawkville (250k net acres1) a mixof condensate and gas with NGLs
Approximately 75% of our FY14Onshore US drilling activity isfocused on the Eagle Ford
Continuous drilling is required toretain leases in Hawkville witheach investment decision subjectto strict economic criteria
condensate window
BHP Billiton acreage
Black Hawk
Hawkville
BHP Bil liton Eagle Ford acreage posi tion
1. As at 30 June 2013.
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
72/90
Hawkville mix of condensate and gas with NGL
8/13/2019 BHP Billiton Investor Briefing - Day 2
73/90
Hawkville mix of condensate and gas with NGL
Slide 71
235 net producing wells as at 30 June 2013
Average production of 66 kboe/d(BHP Billiton share) at approximately 45%liquids during the September 2013 quarter
Approximately 90% average working interest
Good condensate rates and NGL yields inthe north of the field
Southern area primarily gas with NGL
preparing to release roughly 50k netacres in FY14 that do not meeteconomic criteria for retention
Hawkville acreage position
condensate window
BHP Billiton acreage
Typical single well economics1 (FY14 program, 100% basis)
Initial production2 1.0 kboe/d; 44% condensate; 22% NGL
Resources 0.9 MMboe; 52% condensate; 19% NGL
Well cost3 US$11 million
Rate of return4 19%
1. Within liquids rich gas focus area.2. Initial production averaged over a 30 day period.
3. Well cost includes drilling, completion and facility single well costs.4. Rate of return after tax, based on September 2013 futures prices.
BHP Billiton Investor briefing: Petroleum, December 2013
Haynesville strong returns at current prices
8/13/2019 BHP Billiton Investor Briefing - Day 2
74/90
Haynesvil le acreage by Recoverable Resource
y g p
Slide 72
Premier acreage position in one of the mostproductive shale gas plays in the US
936 net producing wells as at 30 June 2013
Average dry gas production of 89 kboe/d(BHP Billiton share) during the September2013 quarter
FY14 drilling activity in sections with workinginterest ranging from 50-100%
Typical single well economics (FY14 program, 100% basis)
Initial production1 8.5 MMcf/d
Resources 11 bcf gas
Well cost2 US$10 million
Rate of return3 30%
>10 8-10 6-8
8/13/2019 BHP Billiton Investor Briefing - Day 2
75/90
y p g
Slide 73
Extensively drilled with low geologic risk
959 net producing wells as at 30 June 2013
Average dry gas production of 68 kboe/d
(BHP Billiton share) during the September2013 quarter of which approximately 45%was non-operated
Operated rig program currently suspendedwith value preserved for future investment
Continuing to selectively invest in strongnon-operated opportunities within the coreof the field Typical single well economics (FY14 OBO program, 100% basis)
Initial production1 3.8 MMcf/d gas
Resources 4.5 bcf gas
Well cost2 US$3 million
Rate of return3 25%
Fayetteville map with FY13 non-operated dril ling
FY13 non-operated wells put online
1. Initial production averaged over a 30 day period.
2. Well cost includes drilling, completion and facility single well costs.3. Rate of return after tax, based on September 2013 futures prices.
>5 4-5 3-4 2-3
8/13/2019 BHP Billiton Investor Briefing - Day 2
76/90
focus area
Slide 74
BHP Bil liton acreage in the Permian basin
Focus area
Divestment area
Divestment area
Under evaluation
BHP Billiton Investor briefing: Petroleum, December 2013
Permian unique multiple horizon potential
8/13/2019 BHP Billiton Investor Briefing - Day 2
77/90
q p p
Slide 75
Large liquid bearing column creates thepotential for multiple economicallyproductive horizons
A vertical well program followed by
targeted horizontal wells has been usedto appraise the play
Extensive appraisal program given thelarge areal and vertical footprint
Lease ownership interest can vary bydepth and horizon
Lower
Middle
Upper
3rd
2nd
1st
Avalon
BoneS
pring
Wolfcamp
Schematic for
representative purposes
Approximately4,0
00feetth
ick
BHP Billiton Investor briefing: Petroleum, December 2013
Permian targeting a 100 kboe/d development
8/13/2019 BHP Billiton Investor Briefing - Day 2
78/90
g g p
Slide 76
Production rate recent wells in focus area(boe/d, 100% basis)
Well results support planned 100 kboe/ddevelopment within the focus area withapproximately 60% liquids
Process of acquiring and consolidating our
acreage position
Testing multiple productive horizons
Significant productivity upside with lowerwell cost and higher recovery as we havedemonstrated in Black Hawk
(days)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0 50 100 150 200
BHP Billiton Investor briefing: Petroleum, December 2013
Shale capital allocation optimised for value
8/13/2019 BHP Billiton Investor Briefing - Day 2
79/90
p p
Slide 77
1. For every operated well, we calculate the optimumtiming to deliver maximum value, utilising forwardprice projections and cost learning curves
2. We test the sensitivity of value to timing, assessing
the impact of acceleration or deferral
3. We allocate capital based on this analysis whiletaking into account:
acreage retention requirements
operational capability
competing non-operated opportunities
appraisal and land capture objectives
capital availability
Eagle Ford
Haynesville
Permian
Fayetteville
BHP Billiton Investor briefing: Petroleum, December 2013
Timing investment for maximum value
8/13/2019 BHP Billiton Investor Briefing - Day 2
80/90
g
Slide 78
Capital allocation methodology informs rigprogram decisions to capture maximumvalue
Well inventory can be categorised into three
groups, reflecting the sensitivity of value totiming of investment
group 1: maximum value deliveredthrough acceleration, deferral erodesvalue liquids rich wells
group 2: value largely insensitive totiming wet gas and prolific dry gaswells
group 3: value enhanced throughdeferral less prolific dry gas wells
0
25
50
75
100
year
1
year
2
year
3
year
4
year
5
year
6
year
7
year
8
year
9
year
10
group 1 wells
group 2 wellsgroup 3 wells
Illustration of value sensitivi ty to spud date(% of maximum NPV delivered relative to spud date)
defer for value
accelerate
insensitive to timing
BHP Billiton Investor briefing: Petroleum, December 2013
Video the drilling and completions process
8/13/2019 BHP Billiton Investor Briefing - Day 2
81/90
Slide 79BHP Billiton Investor briefing: Petroleum, December 2013
Committed to sustainable development
8/13/2019 BHP Billiton Investor Briefing - Day 2
82/90
Slide 80
Be the safest company in industry
Protect the land where we operate
Safeguard and manage water resources
Minimise air emissions
Be a good neighbour to our communities
BHP Billiton Investor briefing: Petroleum, December 2013
Manufacturing process, ideally suited for
productivity improvement
8/13/2019 BHP Billiton Investor Briefing - Day 2
83/90
productivity improvement
Slide 81
Developmentplans and siteselection
Negotiations
Permitting
Clearing andconstruction
Well pads andsupport systems
Well design
Support services
Location moves
Inventorymanagement
Water availability
SIMOPS1
Equipmentprocurement
Coordination
Infrastructure and PipelinesInfrastructure and Pipelines
Right of Way negotiations
Construction
StakeStake BuildBuild DrillDrill CompleteComplete ConnectConnect
1. Simultaneous operations.
BHP Billiton Investor briefing: Petroleum, December 2013
Productivity opportunities have been identified
and actioned
8/13/2019 BHP Billiton Investor Briefing - Day 2
84/90
and actioned
Slide 82
Repetitive, manufacturing nature of shale isideally suited to our productivity agenda
We are targeting multiple opportunities todeliver material value
reduce drilling costs per well throughefficiency and supply chain management
increase ultimate recovery throughcompletions optimisation and well downspacing
reduce spud to sales cycle time toaccelerate cash flow through SIMOPSand pad drilling optimisation
Our productivity initiatives have the potential to
increase NPV by 20% in the Black Hawk field
Multiple opportunities to deliver material value(Black Hawk, % NPV improvement)
drilling costs improvedrecovery
spud to salescycle time
20% NPVimprovementopportunity
0
5
10
15
20
BHP Billiton Investor briefing: Petroleum, December 2013
Util ising benchmarking and repetit ion of best
practice to drive performance
8/13/2019 BHP Billiton Investor Briefing - Day 2
85/90
0
4
8
12
sitepreparation
drilling completions well sitefacilities
total wellcost
time sensitive
non-time sensitive
0
5
10
15
200 5 10 15 20 25
pacesetteraverage well
practice to drive performance
Slide 83
Total well costs include site preparation andwell site facilities
~25% of our well costs are time sensitive
We have utilised a pacesetter concept toimprove time performance and repetition ofbest practice
pacesetter concept utilises a compositebenchmark of fastest drilling times forindividual well segments across all wells
13-3/8
9-5/8
5-1/2
Pacesetter well dril ling times(measured depth, thousand feet)
(days)
Components of Black Hawk well cost(US$ million)
(casing design)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
86/90
Increased recoveries provide the greatest upside
8/13/2019 BHP Billiton Investor Briefing - Day 2
87/90
Slide 85
We are targeting an improvement in ultimaterecovery from completion optimisation andwell downspacing
Multiple field trials are underway to evaluate
various components of completion design
high temperature gels for betterproppant transport
stage spacing to maximise stimulatedrock volume
reservoir modelling to simulate stresscapture and optimise well sequencing
Early results have significantly exceededexpectations
Significant opportunity to replicate thissuccess across our Onshore US business
Improving well EUR through opt imal stage spacing(% improvement in cumulative production)
Successfully trialling high temperature frac fluids(% improvement in cumulative production)
0
20
40
60
0 10 20 30 40 50 60
individual well
0
20
40
0 10 20 30
individual well
(days)
(days)
BHP Billiton Investor briefing: Petroleum, December 2013
8/13/2019 BHP Billiton Investor Briefing - Day 2
88/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
89/90
8/13/2019 BHP Billiton Investor Briefing - Day 2
90/90