BHP Billiton will slash the number of drilling rigs operating in its US onshore shale division by about 40 per cent in response to plunging oil prices, the company revealed today.
BHP said the cuts, equal to about 10 rigs, would be imposed by the middle of this calendar year, though it emphasised that production guidance for the current financial year would not be changed thanks to the increased efficiency.
But it warned further cuts were possible.
“The revised drilling program will benefit from significant improvements in drilling and completions efficiency,” BHP said.
“Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage.
“However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.”
BHP also unveiled another production record at its iron ore division, where output rose 15 per cent to 124 million tonnes in the six months to December 31, 2014.
BHP shares were 54c higher at $28.02 in early trading.
BHP said the cuts, equal to about 10 rigs, would be imposed by the middle of this calendar year, though it emphasised that production guidance for the current financial year would not be changed thanks to the increased efficiency.
But it warned further cuts were possible.
“The revised drilling program will benefit from significant improvements in drilling and completions efficiency,” BHP said.
“Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage.
“However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.”
BHP also unveiled another production record at its iron ore division, where output rose 15 per cent to 124 million tonnes in the six months to December 31, 2014.
BHP shares were 54c higher at $28.02 in early trading.