dg year end presentation
DESCRIPTION
Year End Presentation for DG CompanyTRANSCRIPT
FY 2009 END-OF-YEAR RESULTSAugust 27, 2009
David GoodallChief Executive Petroleum
Steven SchulenbergPresident, Production
Byron GrigsbyPresident, Development
Barry BettesPresident, Exploration
Slide 1Slide 1
FY 2009 End-of-Year Results, August 27, 2009 Slide 2
Disclaimer
Purpose of PresentationThis presentation is strickly for the use of observing David Goodall’s abilities within the PowerPoint presentation arena.
Any information shown will be fictitious and obscured for confidentiality.
FY 2009 End-of-Year Results, August 27, 2009 Slide 3
DG Company – Full Year Results FY 2009
DG Company Corporate Results
DG Company Petroleum Results
Accomplishments and Path Forward by Divisions
Scorecard
Slide 3
FY 2009 End-of-Year Results, August 27, 2009 Slide 4
DG Company – Financial Highlights
Underlying EBITDA of $22.3 billion
Underlying EBIT of $18.2 billion
Attributable profit (excluding exceptionals) of $10.7 billion
Record cash flow of $18.9 billion
Earnings per share (excluding exceptionals) 192.7 US cents
Final dividend of 41 US cents, taking the full year dividend to 82 US cents, up 17.1% on last year
Strong financial position – Net gearing at 12.1%
FY 2009 End-of-Year Results, August 27, 2009 Slide 5
DG Company – Financial Highlights
Underlying EBITDA of $XX.X billion
Underlying EBIT of $XX.X billion
Attributable profit (excluding exceptionals) of $XX.X billion
Record cash flow of $XX.X billion
Earnings per share (excluding exceptionals) XXX.X US cents
Final dividend of XX US cents, taking the full year dividend to XX US cents, up XX.X% on last year
Strong financial position – Net gearing at XX.X%
FY 2009 End-of-Year Results, August 27, 2009 Slide 6
Strong Cash Flow – Delivering Value to Shareholders
(a) Includes capital and exploration expenditures (excludes acquisitions).FY2005 to FY2009 have been calculated on the basis of IFRS. Prior periods have been calculated on the basis of UKGAAP.FY2007 to FY2009 cashflow reflects proportional consolidation of joint ventures.
Net Operating Cash Flow(US$bn)
Organic Growth(a)
(US$bn)
Return to Shareholders(US$bn)
2
4
6
8
10
12
14
16
18
20
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009 0
3
6
9
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
Share Buy Backs
Dividends
0
3
6
9
12
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
CAGR: XX% CAGR: XX%
Dividends CAGR: XX%
FY 2009 End-of-Year Results, August 27, 2009 Slide 7
Underlying EBIT by Customer Sector Group
Year Ended June (US$m) 2009 2008
Petroleum 4,085 5,485
Aluminium 192 1,465
Base Metals (including Uranium) 1,292 7,989
Diamonds & Specialty Products 145 189
Stainless Steel Materials (854) 1,275
Iron Ore 6,229 4,631
Manganese 1,349 1,644
Metallurgical Coal 4,711 937
Energy Coal 1,460 1,057
Group & Unallocated Items (395) (390)
BHP Billiton (Total) 18,214 24,282
FY 2009 End-of-Year Results, August 27, 2009 Slide 8
Underlying EBIT by Customer Sector Group
Year Ended June (US$m) 2009 2008
Petroleum X,XXX X,XXX
Aluminium XXX X,XXX
Base Metals (including Uranium) X,XXX X,XXX
Diamonds & Specialty Products XXX XXX
Stainless Steel Materials (XXX) X,XXX
Iron Ore X,XXX X,XXX
Manganese X,XXX X,XXX
Metallurgical Coal X,XXX XXX
Energy Coal X,XXX X,XXX
Group & Unallocated Items (XXX) (XXX)
BHP Billiton (Total) XX,XXX XXX,XXX
FY 2009 End-of-Year Results, August 27, 2009 Slide 9
Petroleum Performance within DG Company
Petroleum Corporate
EBIT $USD-billions $4.1 $18.2
EBIT Margin 58.2% 40.0%
Capex Spent-billions $1.9 $9.5
Exploration Spent-billions $0.5 $1.2
Projects Started Up 5 Projects - $3.1Billion 7 - $4.1Billion
Projects Under Development 3 Projects - $2.6Billion 8 - $8.1Billion
New Projects Sanctioned 3 Projects - $1.1Billion 4 - $5.9Billion
FY 2009 End-of-Year Results, August 27, 2009 Slide 10
Petroleum Performance within DG Company
Petroleum Corporate
EBIT $USD-billions $X.X $XX.X
EBIT Margin XX.X% XX.X%
Capex Spent-billions $X.X $X.X
Exploration Spent-billions $X.X $X.X
Projects Started Up X Projects - $X.XBillion X - $X.XBillion
Projects Under Development X Projects - $X.XBillion X - $X.XBillion
New Projects Sanctioned X Projects - $X.XBillion X - $X.XBillion
FY 2009 End-of-Year Results, August 27, 2009 Slide 11
DG Company – Performance
2009 2008
Production – MM Bbls/Yr 137.20 129.50
Realized Oil Price (US$/bbl) $ 66.18 $ 96.27
Opex/barrel $ 5.50 $ 6.14
Non Cash/barrel $ 9.64 $ 8.66
EBIT/bbl $ 29.75 $ 42.47
Capital Spend-billions $ 1.91 $ 2.11
Exploration Spend-billions $ 0.55 $ 0.69
“Oil, is the important differentiating factor compared to BHP’s competitors, which do not have this positive exposure….”
- Financial Times
12 Aug. 2009
FY 2009 End-of-Year Results, August 27, 2009 Slide 12
DG Company – Performance
2009 2008
Production – MM Bbls/Yr XXX.XX XXX.XX
Realized Oil Price (US$/bbl) $XX.XX $XX.XX
Opex/barrel $ X.XX $ X.XX
Non Cash/barrel $ X.XX $ X.XX
EBIT/bbl $XX.XX $XX.XX
Capital Spend-billions $ X.XX $ X.XX
Exploration Spend-billions $ X.XX $ X.XX
“Oil is the important differentiating factor compared to DG’s competitors, which do not have this positive exposure….”
- Financial Times
12 Aug. 2009
FY 2009 End-of-Year Results, August 27, 2009 Slide 13
DG Company – Volume Growth 2007-2009
IOC World Ranking (2008 Volumes) Company
Production(Average KBOE/Day)
1 ExxonMobil 4,069
2 BP 3859...
14 Anadarko 56215 Apache 536
.
.
.17 Marathon 39919 Hess 39023 BHBP 355
* excludes oil sands mining
Where we are today
FY 2009 End-of-Year Results, August 27, 2009 Slide 14
DG Company – Volume Growth 2007-2009
IOC World Ranking (2008 Volumes) Company
Production(Average KBOE/Day)
1 Company 1 X,XXX
2 Company 2 X,XXX...
14 Company 14 XXX15 Company 15 XXX
.
.
.17 Company 17 XXX19 Company 19 XXX23 Company 23 XXX
* excludes oil sands mining
Where we are today
FY 2009 End-of-Year Results, August 27, 2009 Slide 15
Zero Harm• Record safety performance
Volume Growth• Record production volumes
Costs • Costs per barrel controlled as per budget
Expanding Our Operation• 4 major operated projects started up over 3 years• Pyrenees & Angostura still to come
Reserve Replacement• Over 100% of production replaced
New Opportunities• Establishing new positions in India, Vietnam & Philippines• Now active in 14 countries
Growing Organizational Capacity• 800 New Employees in last 3 years• More functional depth across Petroleum
DG Company – Highlights FY 2009
FY 2009 End-of-Year Results, August 27, 2009 Slide 16
Zero Harm• Record safety performance
Volume Growth• Record production volumes
Costs • Costs per barrel controlled as per budget
Expanding Our Operation• X major operated projects started up over X years• Project 1 & Project 2 still to come
Reserve Replacement• Over 100% of production replaced
New Opportunities• Establishing new positions in Country 1, Country 2 & Country 3• Now active in XX countries
Growing Organizational Capacity• XXX New Employees in last X years• More functional depth across Petroleum
DG Company – Highlights FY 2009
FY 2009 End-of-Year Results, August 27, 2009 Slide 17
DG Company– HSE Performance
Best Petroleum performance ever
Best among DG companies
Excellent performance against peers*
60% reduction in Zero Barrier incidents
Liquids spills reduced to 3.7 barrels
All in a year of very high activity:
• Drilling in 5 countries
• 2 project start-ups
• 8 in-field exploration activities
Slide 9
* OGP Safety Performance Indicators Report No 419, May, 2009
Total Recordable Incident Frequency Rate
1.0
0.0
2.0
3.0
4.0
5.0
2006 2007 2008 2009
X.XXX.XXX.XX
X. XX
Lost Time Incident Frequency Rate
0.5
0.0
1.0
1.5
2.0
2.5
2006 2007 2008 2009
XX.XX
X.XX
X.XX
FY 2009 End-of-Year Results, August 27, 2009 Slide 18
Lost-Time Injury Frequency
DG Company
We were the only company in this industry ranking that achieved zero LTIs.
FY 2009 End-of-Year Results, August 27, 2009 Slide 19
FY 2009 End-of-Year Results, August 27, 2009 Slide 20
Production Division – Achievements
Safety – 85% Reduction in Recordable Incidents
Volumes – 316,000/day in 2007 to 475,000/day in July
Performance - >94% Facility/Well Uptime
Reserves - >100% Replacement
Operating Costs - Top Decile
FY 2009 End-of-Year Results, August 27, 2009 Slide 21
Production Division – Achievements
Safety – XX% Reduction in Recordable Incidents
Volumes – XXX,XXX/day in 2007 to XXX,XXX/day in July
Performance - >XX% Facility/Well Uptime
Reserves - >XXX% Replacement
Operating Costs - Top Decile
FY 2009 End-of-Year Results, August 27, 2009 Slide 22
Safety Milestones
Trinidad: Incident free year in FY2009
Australia: Reduced TRIR from 16.0 in 2007 to Zero today
Pakistan: 8 years Lost-Time Incident-free
Algeria: 1,000 days Lost-Time Incident-free
UK: 3 years Lost-Time Incident-free
GOM: 16 years Lost-Time Incident-free
FY 2009 End-of-Year Results, August 27, 2009 Slide 23
Safety Milestones
Country 1: Incident free year in FY2009
Country 2: Reduced TRIR from XX.X in 2007 to Zero today
Country 3: X years Lost-Time Incident-free
Country 4: X,XXX days Lost-Time Incident-free
Country 5: X years Lost-Time Incident-free
Country 6: XX years Lost-Time Incident-free
FY 2009 End-of-Year Results, August 27, 2009 Slide 24
0
20
40
60
80
100
120
140
FY05 FY06 FY07 FY08 FY09 YTDFY10
kbo
e p
er d
ay
Gulf Of Mexico Production
Jan 05
Jul 08
Oct 07
Mar 09
FY 2009 End-of-Year Results, August 27, 2009 Slide 25
0%
20%
40%
60%
80%
100%
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
BHPB Operated Uptime Performance
94.2% UptimeStybarrow 93%Trinidad 95%West Cam 96%Neptune 97%Pakistan 98%Ohanet 98%Minerva 99%UK 90%
FY 2009 End-of-Year Results, August 27, 2009 Slide 26
Big Oil
West
South
East
Big Oil Southappraisal well
& sidetrack
North
Gra
ben
1 mi.
Big Oil Westappraisal well Resources
Base - 2007: X.X billion West - 2008: +X.X billion South - 2009: +X.X billion North: more to come? Total: X.X billion
Major Oil Total: X.X billion
FY 2009 End-of-Year Results, August 27, 2009 Slide 27
Production Division – Moving Forward
Achieve Zero Harm
Strive for 100 / 100 / 100
Execute aggressive Development Drilling Program - $740MM
Start up Pyrenees FPSO 1st half of 2010
Develop and drill the huge Atlantis & Mad Dog reserves
Replace 100% reserves in a rapidly growing business
FY 2009 End-of-Year Results, August 27, 2009 Slide 28
Production Division – Moving Forward
Achieve Zero Harm
Strive for 100 / 100 / 100
Execute aggressive Development Drilling Program - $XXXMM
Start up Drill Site 1 FPSO 1st half of 2010
Develop and drill the huge Drill Site 2 & Drill Site 2 reserves
Replace 100% reserves in a rapidly growing business
FY 2009 End-of-Year Results, August 27, 2009 Slide 29
FY 2009 End-of-Year Results, August 27, 2009 Slide 30
Development Division Achievements
Shenzi• Startup 3 months early; above design capacity
NWS• Started up LNG Train 5 and Angel
Pyrenees• Recovering schedule, FPSO construction and sub-sea installation
Angostura• In construction and on track
Macedon• Final design in progress
Drilling• Completed Pakistan and Algeria Programs• Excellent Performance at Mad Dog South• Significant accomplishments at Pyrenees
FY 2009 End-of-Year Results, August 27, 2009 Slide 31
Development Division Achievements
Drill Site 1• Startup 3 months early; above design capacity
Drill Site 2• Started up LNG Drill 1 and Drill 2
Drill Site 3• Recovering schedule, FPSO construction and sub-sea installation
Drill Site 4• In construction and on track
Drill Site 5• Final design in progress
Drill Site 6• Completed Country 1 and Country 1 Programs• Excellent Performance at Drill 7 South• Significant accomplishments at Drill 8
FY 2009 End-of-Year Results, August 27, 2009 Slide 32
HSE - Continually Striving for Excellence
No Hands Lifting
Used first at Country 1
Thought it COULDN’T BE DONE
Only X out of XXX operations needed hands
NO INJURIES
FASTER
After
Before
FY 2009 End-of-Year Results, August 27, 2009 Slide 33
Biggest single capital investment by DG Company - EVER $X.X billion spent to date. $X.X billion to go.
1 10 20 30 40 50 60 70 80 90 100 110 120 130 140 1500
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
22-M
ar
5-A
pr
19-A
pr
3-M
ay
17-M
ay
31-M
ay
14-J
un
28-J
un
12-J
ul
26-J
ul
9-A
ug
23-A
ug
MB
OP
D
Actual Ramp-up
DAYS from Start
Sanction Ramp-upActual
Start-up
Sanction Start-up
Large Oil – Delivered Sooner and Better
FY 2009 End-of-Year Results, August 27, 2009 Slide 34
Biggest single capital investment by BHP Billiton - EVER $2.5 billion spent to date. $1.9 billion to go.
1 10 20 30 40 50 60 70 80 90 100 110 120 130 140 1500
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
22-M
ar
5-A
pr
19-A
pr
3-M
ay
17-M
ay
31-M
ay
14-J
un
28-J
un
12-J
ul
26-J
ul
9-A
ug
23-A
ug
MB
OP
D
Actual Ramp-up
DAYS from Start
Sanction Ramp-upActual
Start-up
Sanction Start-up
1 10 20 30 40 50 60 70 80 90 100 110 120 130 140 1500
10
20
30
40
50
60
70
80
90
100
110
120
130
140
15022
-Mar
5-A
pr
19-A
pr
3-M
ay
17-M
ay
31-M
ay
14-J
un
28-J
un
12-J
ul
26-J
ul
9-A
ug
23-A
ug
MB
OP
D
Actual Ramp-up
DAYS from Start
Sanction Ramp-upActual
Start-up
Sanction Start-up
Large Oil – Delivered Sooner and Better
FY 2009 End-of-Year Results, August 27, 2009 Slide 35
Industry leading HSE performance
Initiatives often last longer than our tenure
Best-in-class drilling performance being achieved in all operations
Wells are not just fast, they deliver the barrels too!
Drilling – Continuing to Raise the Bar
FY 2009 End-of-Year Results, August 27, 2009 Slide 36
Industry leading HSE performance
Initiatives often last longer than our tenure
Best-in-class drilling performance being achieved in all operations
Wells are not just fast, they deliver the barrels too!
Drilling – Continuing to Raise the Bar
FY 2009 End-of-Year Results, August 27, 2009 Slide 37
Moderate Oil – Delivering Our Next Challenge
FY 2009 End-of-Year Results, August 27, 2009 Slide 38
Operated Projects
• Angostura Gas – Keep on track, integrate NGC activity
• Macedon – Progress to Sanction, Conclude Gas Spec Issue and Sales Contracts
OBO Projects
• NWS – Assist NR2 and CWLH Recovery
• Bass Strait – Monitor Kipper and Turrum
• Mad Dog – Progress New Rig, MD West and MD South Development Options
• Scarborough – Narrow from 3 to 1 Development Options
• Browse – Work Both B2B and B2K Select Decision Drilling
• Complete Pyrenees Program
• Success in new campaigns at Liverpool Bay and Sabah Supply
• Deliver the iSet project to the business
Development Division – Moving Forward
FY 2009 End-of-Year Results, August 27, 2009 Slide 39
Operated Projects
• Drilling Site 1 – Keep on track, integrate NGC activity
• Drilling Site 2 – Progress to Sanction, Conclude Gas Spec Issue and Sales Contracts OBO Projects
• Drilling Site 3 – Assist NR2 and CWLH Recovery
• Drilling Site 4 – Monitor Kipper and Turrum
• Drilling Site 5 – Progress New Rig, MD West and MD South Development Options
• Drilling Site 6 – Narrow from 3 to 1 Development Options
• Browse – Work Both B2B and B2K Select Decision Drilling
• Complete Drilling Site 7 Program
• Success in new campaigns at Drilling Site 8 and Sabah Supply
• Deliver the iSet project to the business
Development Division – Moving Forward
FY 2009 End-of-Year Results, August 27, 2009 Slide 40
FY 2009 End-of-Year Results, August 27, 2009 Slide 41
Exploration: Building Our Future
Record acreage and seismic spending
Capturing material / high quality opportunities
Aggressively maturing & preparing to drill
FY 2009 End-of-Year Results, August 27, 2009 Slide 42
Laying the Foundation
Seismic acquisition• Harsh environments, outstanding HSE performance• Industry leader in multi azimuth acquisition techniques• Since FY06-$XXXMM on acquisition; $XXXMM on
processing• Acquired XX,XXX line km of 2D and XX,XXXkm2 3D
• All current and future key areas covered World-class subsalt imaging capabilities
• Benchmarked with industry• State of the art techniques and processes• Competitive advantage in subsalt, foldbelts
Partner with IT to enhance our capabilities• Integrated hardware/software strategy• Data management & security
Falkland Islands
FY 2009 End-of-Year Results, August 27, 2009 Slide 43
Opportunity CaptureMaterial, High Quality, Focused
Built experienced New Ventures organization
• Global remit, but focused
• Rigorous basin analysis – “starts with the rocks”
• Have established material position in Country 10
• Country 11 and Country 12 Exploration teams have captured key, new acreage in core basins
• Drilling Site 10 – spent $XXXMM, XXX/XXX (XX%) blocks won; control 2 key plays
• Drilling Site 11 – WA-335-P Legal and L&UA – vital skills to obtain contracts, terms 2006 to 2009
• Acreage (km2) +XX% to XXX,XXXkm2
• Control
• Operated % +XX% to XX%
• Working Interest % +XX% to XX%Block 5 Onshore Country 13
FY 2009 End-of-Year Results, August 27, 2009 Slide 44
Maturing & Executing the Portfolio:Delivering on Commitments
Focus on maturation and Ready to Drill• Risked portfolio volume increased by +XX% (XXX MMBOE)• “Project” maturation plans in place for each piece of acreage
Meet our strategic commitment• Drill X-X “High Impact” wells & test X-X new plays per year
FYXX/XX/XX – Drilling up to XX wells across X countries
0
100
200
300
400
500
FY07 FY08 FY09 FY10 FY11
$MM
Jun-08 Jun-09
Risked MMboe
0
200
400
600
800
1000
1200
1400
1600
Captured
Pending
Drilling SpendPortfolio Volume
DG Affiliated Deepwater Expedition
FY 2009 End-of-Year Results, August 27, 2009 Slide 45
FY10-FY11 – Proposed Drilling Campaign
Canadian Laurentian1 well planned
Gulf of Mexico6 wells planned
NWS Australia4 wells planned
Malaysia4 wells plannedPhilippines2 wells plannedVietnam2 wells planned
Gippsland3 wells planned
Falklands2 wells planned
FY 2009 End-of-Year Results, August 27, 2009 Slide 46
FY10 – A Challenging and Exciting Year!
HSE – New challenges & operating environments
FY10/FY11 Focus on Exploration Drilling
• Resource replacement critical to replace increasing production levels
Continued Opportunity Capture and Maturation Focus
• Must continue to high grade, balance risk/reward and deliver on commitments
Managing a Global, Operated Portfolio
• Extensive drilling program, multiple new country entries will require multi-functional support to be successful
FY 2009 End-of-Year Results, August 27, 2009 Slide 47
FY10 – A Challenging and Exciting Year!
HSE – New challenges & operating environments
FY10/FY11 Focus on Exploration Drilling
• Resource replacement critical to replace increasing production levels
Continued Opportunity Capture and Maturation Focus
• Must continue to high grade, balance risk/reward and deliver on commitments
Managing a Global, Operated Portfolio
• Extensive drilling program, multiple new country entries will require multi-functional support to be successful
FY 2009 End-of-Year Results, August 27, 2009 Slide 48
Wrap Up
FY 2009 End-of-Year Results, August 27, 2009 Slide 49
FY2009 Scorecard Results
Item Target Result Weighting Score
Total Recordable Incident Frequency Rate per million hours X.XX X.XX XX%
Zero Barrier Incident Frequency Rate per million hours X.XX X.XX X%
EBIT (excluding price and FX effects) US$ million X,XXX X,XXX XX%
Production Volume million boe XXX.X XXX.X XX%
Field Operating Cost Rate US$ per boe X.XX X.XX X%
Depreciation Rate US$ per boe XX.XX X.XX X%
Direct G&A Costs US$ million XXX XXX.X X%
Reserves Additions million boe XXX XXX.X X%
Resource Additions million boe XXX XX.X X%
Development Projects Index capital & schedule XXX% XXX% XX%
CSG Components XX%
Individual Components Average result XX%
Total XXX%
XX.X%
X.X%
X.X%
X.X%
XX.X%
XX.X%
XX.X%
XX.X%
X.X%
XX.X%
XX.X%
XX.X%
XXX.X%
FY 2009 End-of-Year Results, August 27, 2009 Slide 50
Investment in Our Employees
Career ladders
• A road map for career progression – transparency Competency development
• Tools for developing functional excellence 110% Jobs
• Career management through functional “homes” Supervisory Toolkit
• Assuring the fundamentals of managing people Executive Leadership Program
• Building executive leadership capacity and alignment
“I make a difference.”
FY 2009 End-of-Year Results, August 27, 2009 Slide 51
BHP Billiton Petroleum – Summary - DLG
Excellent performance – Safety, Volumes, Costs, Projects, Reserves
Shareholder impacted – first downturn in 10 years
Invest through the cycle
More is expected in FY10
We need your Best.
FY 2009 End-of-Year Results, August 27, 2009 Slide 52