BHP, mining company said its first appraisal well at Trion in Mexico struck oil, even as its fourth quarter oil production was mostly flat.
It spud appraisal well Trion-2DEL in Nov. 2018 and encountered oil in line with expectations, the company, which also mines copper, iron ore and potash, said in an operational review.
This was the first well drilled by an international operator in the Mexican deepwater. A down-dip sidetrack of the Trion-2DEL well commenced on 4 January 2019 to further appraise the field, including the oil water contact.
The company’s Petroleum production in the quarter ending Dec. 31 slipped 2 per cent to 30 million barrels of oil equivalent (boe) compared to the same period a year ago, BHP said.
It maintained an earlier petroleum production guidance for 2019 of 113 million to 118 million barrels of oil equivalent with volumes expected to be towards the upper end of the guidance range.
Total conventional petroleum production was broadly flat at 63 million boe during the fourth quarter.
Crude oil, condensate and natural gas liquids production declined by 5 per cent to 29 million barrels due to natural field decline across the portfolio and a 70-day planned dry dock maintenance program at Pyrenees completed during the September 2018 quarter. This decline was partially offset by higher uptimes at the company’s Gulf of Mexico assets, BHP said.
Meanwhile, natural gas production was also broadly flat at 206 bcf, reflecting increased tax barrels at Trinidad and Tobago in accordance with the terms of a Production Sharing Contract. This was partially offset by planned maintenance at Trinidad and Tobago in the December 2018 quarter and natural field decline across the portfolio.
“Our first appraisal well at Trion in Mexico encountered oil and we added to our exploration options with successful bids for two licences offshore Eastern Canada,” BHP chief executive officer, Andrew Mackenzie said.
“We completed the sale of our US shale assets and returned US$5.2 billion to shareholders through a share buy-back program, with a further $5.2 billion to be returned as a special dividend on 30 January 2019,” Mackenzie said.
BHP made a successful bid for to fully acquire interest and operatorship in two exploration licences for the blocks 8 and 12 in the Orphan Basin, offshore Eastern Canada.
However, it plugged and abandoned two appraisal wells – the Samurai-2 in the US Gulf of Mexico and the Concepcion-1 in Trinidad and Tobago.
Additionally, BHP in Nov. completed the sale of its interests in the Bruce and Keith oil and gas fields in the United Kingdom to Serica Energy UK Ltd, with an effective date of 1 January 2018.
At the end of December 2018, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of $10.6 billion over the life of the projects, it said.