BHP Cites Production Boost in Second Quarter

BHP Billiton reported that for petroleum, underlying EBIT was a record USD$5,489 million, an increase of USD$2,475 million, or a significant 82.1%, compared to last year.

Record production and a 13% year on year volume growth is a strong start to BHP's expected 10% compound annual growth rate through to financial year 2011. Strong growth in production was achieved due to the newly commissioned Stybarrow (Australia), Genghis Khan and Atlantis (both US), excellent operated performance and record natural gas volumes. Ramp up of these projects and future growth options will continue to increase the weighting of high margin liquids in BHP's portfolio mix.

Underlying EBIT was positively impacted by higher average realized oil prices per barrel of USD$96.27 (compared with USD$63.87), higher average realized natural gas prices of USD$3.87 per thousand standard cubic feet (compared with USD$3.19) and higher average realized prices for liquefied natural gas of USD$8.95 per thousand standard cubic feet (compared with USD$6.97).

Gross exploration expenditure was USD$692 million, USD$297 million higher than last year. Exploration expenditure charged to profit was USD$359 million, including USD$47 million of previously capitalized exploration now written off. During the year, BHP successfully captured significant acreage in the Gulf of Mexico lease sale process, made the large Thebe gas discovery (offshore Australia) and continued to build a solid portfolio of opportunities with seismic data acquired in Colombia, Malaysia, Falklands, Australia and the deepwater Gulf of Mexico.

In addition, for the second consecutive year the Company achieved greater than 100% reserve replacement.