BHP Billiton Share Discussion Threads

[action] 07/6/2017 08:18

Does any one have date for july17 update pls

[loganair] 02/6/2017 08:57

What BHP Billiton Limited Investors Need to Know About the Future:


In April, Elliott Management urged BHP Billiton to spin off its oil drilling business. It's a high-profile fight in the mining industry that could have a material impact on BHP's corporate outlook and performance. But you can't look at this proposal in isolation because BHP Billiton has meaningfully transformed itself over the past three years.

Way back when:

BHP Billiton didn't become BHP Billiton until 2001. That was when Broken Hill Properties (it changed its name to BHP Limited in 2000) and Billiton merged. The purpose was to create a diversified mining giant, with exposure to commodities including iron ore, coal, oil, aluminum, copper, nickel, manganese, and chrome.


The idea that bigger was better in commodities worked reasonably well through the first decade of the new millennia. The driving force was demand out of fast-growing China. And then, in 2011, something changed. Commodity prices across the board started to move lower. At the same time, expansion projects made when prices were heading higher were beginning to come online, adding extra supply at exactly the wrong time.

Miners across the globe found themselves in financial difficulty. BHP was no different. The one commodity that notably held up for a spell was oil, which didn't start to head materially lower until mid-2014. Cost-cutting and pulling back on growth projects, where possible, was the new normal.

But BHP decided to go a step further: It spun off South32 in fiscal 2015. This new company took on all or part of BHP's alumina, aluminum, thermal coal, manganese, nickel, silver, lead and zinc businesses. Mostly it pulled apart what was created when Broken Hill Properties and Billiton merged in 2001, leaving BHP to focus on iron ore, copper, metallurgical coal, and oil.

There was cost-cutting, too:

While the South32 spinoff is the enormous change over the last three years, the company's cost-cutting efforts shouldn't go unnoticed. After adjusting for the spinoff, BHP's capital spending went from a touch over $16 billion in fiscal 2014 to roughly $7.7 billion in 2016, a drop of around 50%. In fact, capital spending was even higher than that in fiscal 2013 at $22.4 billion -- putting the total decline through 2016 at 65% over four years.

That, however, wasn't the only place BHP Billiton was saving money. It also managed to trim its wage and salary expenses by nearly 30% between fiscal 2014 and 2016. In other words, BHP's management team was working hard to adjust to a very different market environment. And it apparently thought its collection of assets was a good foundation for the future, or it would have only shoved more into South32.

Doing nothing:

That brings us to early 2017, when Elliott Management started a public push to get BHP Billiton to increase shareholder value through a trio of actions, notably including that split off its oil business. When BHP pushed back, basically suggesting that it had already made significant changes and wanted to give its approach more time to play out, Elliott accused the company of taking a 'do nothing approach' to its suggestions.

Oil is a big part of BHP Billiton's long-term plan.

If you look at the history, however, BHP has a point. It's hardly been sitting still, and the spin-off of South32 is still quite fresh. Moreover, the oil business has historically been one of its most high-margin business units. Getting rid of all of the oil division doesn't seem like it will make BHP a better company over the long term, even if it results in a short-term boost for shareholders.

A changing giant:

If you are looking for short-term gains, then Elliott's push for change might appeal to you. However, BHP has been working hard to adjust its business to better compete today and in the future. Oil is expected to be a big part of that. For long-term investors, it seems more prudent to give the already massive changes that have occurred time to play out. BHP Billiton has changed a lot over the last three years, so it's smart to take a breather.

[loganair] 24/5/2017 09:27

Unfortunately, Fayetteville has acted as a burden for BHP since it was acquired by the miner in February 2011 for US$4.75 billion. It contributed negative US$134 million to BHP’s underlying earnings (EBIT) in the 2016 financial year, based on revenue of US$246 million, while it was also charged with a US$1.91 billion impairment for the year. It had net operating assets of US$919 million as at the end of December 2016.

Indeed, much of this has been caused by lower oil prices, which crashed between mid-2014 and early-2016. They have rebounded in the time since which could allow BHP to realise a higher price on a sale, should it follow through with its plans.

[anley] 21/5/2017 17:56

Why are you posting old news which I posted over a week ago...........there is more I could say but it may get treated as inside information.....

[loganair] 17/5/2017 10:25

MELBOURNE, Australia--BHP Billiton Ltd.'s (BHP.AU) Chief Executive Andrew Mackenzie will meet Wednesday with representatives from Elliott Management Corp., the activist investor pushing for the resources company to shed at least some of its oil and gas assets and boost shareholder returns.

The talks are set to take place on the sidelines of a mining and metals conference in Barcelona, a day after Mr. Mackenzie told an audience there the company was confident a strategy of cutting costs and unlocking latent production capacity could boost the value of the company by up to 50%.

The investment firm managed by Paul Singer has a reputation for slowly grinding away at companies to push through changes.

[loganair] 17/5/2017 10:21

According to financial news wires the analysts at investment bank Macquarie Group ) have reportedly put a bullish $30 share price target on Australia’s largest miner in BHP Billiton.

The Macquarie analysts reportedly enjoyed BHP’s latest update provided by its CEO at the Merrill Lynch Mining Conference in which a plan to cut costs and lift production by the “release of latent capacity across the portfolio” was outlined.

Plans to grow profits on the relative cheap by investing in “latent” capacity rather than new projects are always popular with investors and BHP’s share price edged higher in afternoon trade.

At the conference the BHP chief also outlined plans for “major growth projects” valued at up to US$25 billion that could offer “potential average returns of over 16 per cent at consensus prices.” Some of the projects under consideration are at the group’s Olympic Dam site and elsewhere around the world.

The CEO also addressed the future of BHP’s shale oil assets by flagging that all options were on the table for them including “asset sales”. This is likely to please activist investors who recently have been campaigning for BHP to realise value by selling them off.

[action] 16/5/2017 22:32

Why CEO has to wait for activist to come along to realise that they can increase the value by 50%??

[au24] 16/5/2017 17:17

Nice bounce from lows with the rise in commodities and oil.

[anley] 16/5/2017 15:47

Now we have ........

CEO Andrew Mackenzie fires back, outlining plans he says could lift the value of the company by 50% and double its return on capital; he also defends the petroleum business, saying more value can be extracted via advances in shale technologies and exploration in places like the Gulf of Mexico.

So if you have sold recently you had better buy back your stock or if you are on the side then its your last chance to buy.

So everyone put your money on the big shareholders calling the shots............

[anley] 16/5/2017 15:41

Its hotting up see below.........

BHP CEO Andrew Mackenzie says the company is considering further sales of its U.S. shale gas assets, as BHP copes with renewed attacks from activist hedge fund Elliott Management over the future of its energy business.

BHP spent ~$20B buying U.S. shale assets earlier in the decade and has since written off more than half the value of the acquisitions, and Mackenzie admits "the acquisitions that took us into this business were poorly timed, that we paid too high a price."

A rising tide of analysts and investors are backing the sale of the shale assets, with Deutsche Bank saying BHP could receive ~$9B based on recent deals in the sector; divesting the assets would provide “additional capital to focus on the higher returning conventional assets and minerals portfolio," the firm says.

Reps from BHP and Elliott are scheduled to meet tomorrow on the sidelines of a conference in Barcelona, Bloomberg reports.

[anley] 16/5/2017 10:14

They will keep pushing.........and the other active shareholder will support even the removal of some of the board so watch for that move.

Elliott Management has called for an independent review of BHP's petroleum business, while CEO Andrew Mackenzie rejected the claim that he's not been open to suggestions.

"There is extremely broad and deep-rooted support for proactive steps to be taken by management," declared the activist investor, which owns 4.1% of the miner's U.K. listed branch.

db125.......its not the short term you should consider but one year plus.

The Chinese are going to be spending more on infrastructure (so says my HK desk) so keep an eye on Iron Ore and related minerals.........in the near term.

[db125] 09/5/2017 15:14

Both iron ore and Brent crude failing to hold $50 does not augur well for BLT in the near term!

[sirhedgealot] 08/5/2017 13:08

Top ups it is then.

[anley] 05/5/2017 15:03

The fun has started and what a good time to buy..............

A second BHP Billiton shareholder is pressing for strategic changes at the miner, with Sydney-based Tribeca Global Natural Resources Fund joining Elliott Management to push for a sale of U.S. shale assets and an overhaul of the board and senior management.

Tribeca wants BHP to consider selling its U.S. assets but should maintain its current dual-listed structure, differing its from Elliott's view that BHP should move its primary listing to London, a move Australia's Treasurer has said he would not allow.

Tribeca estimates BHP could fetch $10B for its shale assets, based on recent deals done in the Permian and Eagle Ford shale regions that implied prices of $30K-$40K per net acre.

BHP has said it wants to hold on to its Permian acreage, where it has been consolidating its position by acquiring high grade acreage and is looking to trade acreage or work with companies with adjoining acreage to raise production.

[tpaulbeaumont] 04/5/2017 06:31

weak init, next supports are around 1100, 1025, 975 and 820

[action] 03/5/2017 13:02

It is nearing bottom around 10.50

[au24] 03/5/2017 09:36

Great opportunity to top up then.

[tsmith2] 03/5/2017 08:43

looks like £10 on chart

[sirhedgealot] 01/5/2017 11:50

Bunny, myself, Raffles, Dave the 6th Earl of Bermondsey and Clarence the 3rd Earl of Burberry will be partaking in rounds of golf,drinks and wanton violence at the casino. Asking the lady's of the floor to remove their decollétage from its corsetry for the delectation of the gentlemen present ...upon arriving at the roulette table. May we not fornicate my fortune but instead bet lightly against impossible odds, fear not the loss of a "Winston" "The new fiver note", for there's an elegant plenitude from whenceforth that originated.

[raffles the gentleman thug] 28/4/2017 14:17

Thank you Sirhedgealot !

[sirhedgealot] 28/4/2017 10:27

Commenting just for the Raffles user name :). Gla jolly gentleman.