BHP Guides Lower Petroleum and Higher Iron Ore Prduction

Marcus Jacob
22 Jul, 2015
New York City

Market indexes in Sydney dropped following weak closures in Europe and in New York and consumer price index in the June quarter increased 0.7%, matching expectations. BHP forecasted lower petroleum production in 2016 but iron ore production will continue to rise.

[R]5:30 PM Sydney – Market indexes in Sydney dropped following weak closures in Europe and in New York and consumer price index in the June quarter increased 0.7%, matching expectations. BHP forecasted lower petroleum production in 2016 but iron ore production will continue to rise.[/R]

Australian market indexes dropped 1.6% and halted six-day rally on the weakness in international markets and continued volatility in commodities and gold declined to a new five-year low.

The seasonally adjusted consumer price index in second-quarter ending in June increased 0.7% from 0.2% increase in the first-quarter but dropped from 1.5% in a year ago period, the Australian Bureau of Statistics said today.

Australian dollar closed at 74.16 U.S. cents and in stock trading turnover rose to 733 million shares worth $4.5 billion.

At close, the ASX 200 Index slipped 92.10 or 1.6% to 5,614.60 and the broader All Ordinaries Index slumped 85 to 5,603.50.

In commodities trading, gold slid US$6 to US$1,102 an ounce and Brent crude fell 0.53 cents to close at US$56.51 a barrel.

Australian Stock Movers

BHP Billiton Limited slipped 2.1% to $26.27 after the mining company said group production in the year ending in June jumped 9%. Petroleum production increased 4% to a record 256 million barrels of oil equivalent while copper production was unchanged at 1.7 metric tons.

Iron ore production in Western Australia soared by 13% to 254 million barrels of oil equivalent and metallurgical coal production in the year jumped 13% to 43 metric tons.

Crude oil, condensate and natural gas liquids production in the year increased 17% to 125 million barrels of oil equivalent.

The miner announced that it expects to recognise an impairment charge of approximately US$2.8 billion excluding additional charges in the range of about US$350 million to US$650 million.

BHP Billiton forecasted petroleum production for the fiscal 2016 to decline by 7% to 237 million barrels of oil equivalent.

BHP will release its financial results for the year ending in June on August 25.

Separately, the miner also plans to invest about US$240 million in the Port Hedland Port in Western Australia.

Separately, South 32 Limited declined 2.1% to $1.79 and the company said it has suspended smelting operation in South Africa and the company blamed challenging market conditions.

Boral Limited gained 1.4% to $6.45 after the construction materials supplier forecasted net profit for the year ending in June in the range of $240 million to $250 million.

Boral is scheduled to release its earnings result on August 27.