Independent Oil & Gas (LON:IOG)
Independent Oil & Gas (IOG)# has submitted the Field Development Plan (FDP) for the Blythe Hub, which comprises the Blythe and Elgood fields.
The Blythe and Elgood gas fields are 100% owned and operated by IOG and located in the UK Southern North Sea (SNS) close to existing infrastructure and other IOG-owned licences. Blythe contains independently verified 2P reserves of 34.3BCF and Elgood 22 BCF of 2C resources. A new CPR currently being completed for the Blythe Hub will soon provide up-to-date independently verified estimates of the reserves and resources. Neither Blythe nor Elgood requires further appraisal and on FDP approval the Elgood resources would be upgraded to 2P.
The Blythe Hub is expected to provide the first gas for IOG via the recommissioned Thames Pipeline and therefore the first revenues to the Company from its current portfolio of assets. IOG is in the process of completing the 100% acquisition of the pipeline which is intended to be tested and recommissioned. There are significant synergies with the 100%-owned Vulcan Satellites Hub, containing independently verified 2C resources of 321 BCF, which is also intended to be exported via the Thames Pipeline. IOG is also 100% owner of the Harvey discovery, which lies between the Blythe and Vulcan Satellites Hubs. Harvey needs further appraisal and is currently estimated to have P50 recoverable resources of 113 BCF.
The submission of this FDP brings IOG a step closer to developing its SNS gas assets and generating revenues but it must now find a way to finance its development, we await an update on this in due course.
BHP Billiton (LON:BLT)
BHP Billiton (BLT LN) has announced production results for FY 2017. Despite robust performance in the iron ore and thermal coal divisions where production met guidance, with a 4% and 7% YoY increase to 231mnt and 29mnt respectively, production declined in other key divisions. Iron ore production is guided to another modest increase in FY 2018 to 239-243mnt while thermal coal guidance is for flat production in FY 2018.
Copper production of 1.3mnt was 16% lower YoY largely due to the strikes at Escondida as well as unplanned maintenance at Olympic Dam. Consequently, BLT now believes that unit cost guidance for FY 2017 in the copper division may now not be achievable. However, FY 2018 production guidance is for a 7% increase YoY as production is normalised.
Petroleum production of 208mmboe was down 13% YoY as onshore US development activity was deferred owing to the current pricing environment. FY 2018 guidance is for further cuts to between 180-190mmboe as natural field decline as well as planned maintenance at Mad Dog is expected to more than offset new production.
Met coal production declined 6% YoY to 40mnt although is expected to be between 44-46mnt in FY 2018. Unplanned disruption caused by Cyclone Debbie was the main driver of the FY 2017 decline and the higher production in FY 2018 represents a normalisation.