BHP provides E&P report

Offshore staff

MELBOURNE, Australia -- BHP Billiton Ltd. said in its latest quarterly E&P report that three of five projects were experiencing cost pressure, though all of the projects remain on schedule.

BHP reported a 50% increase, to $1.5 billion, in the cost of the Atlantis South project in the Gulf of Mexico.

First oil from 11 wells is targeted for the second half of this year, BHP said, with peak production expected to reach 200,000 b/d of oil and 180 MMcf/d of natural gas. The costs and schedule for the project remain under review. BHP holds a 44% stake in Atlantis South.

Neptune, another of BHP's GoM fields, also has cost increases, the company said. The first two of seven development wells have been completed on Neptune, which is expected to produce first oil by end of this year. Production will peak at 50,000 b/d of oil and 50 MMcf/d of gas, the company said. BHP has 35% stake in Neptune.

The company's Stybarrow field in Australian waters also experienced cost pressure, according to the report, but remains on schedule for first production in 1Q 2008. Two injection wells and three development wells have been completed, and the FPSO has undergone sea trials. BHP owns 50% of Stybarrow, which is expected to produce 80,000 b/d at peak.

The company's two other major fields remain on budget and on schedule. All of the major contracts for the $200-million Angel field on the North West Shelf have been awarded. Topsides and jacket fabrication are progressing, and first oil is expected at the end of 2008. Peak production from Angel is expected to reach 800 MMcf/d. BHP has 16.67% stake in the field.

The Shenzi field in the GoM is also on target, with first oil expected in mid-2009. Fabrication of the Shenzi topsides and hull are progressing according to plan, the company says. BHP holds a 44% stake in the $1.94-billion Shenzi development, which will produce100, 000 b/d of oil and 50 MMcf/d of gas at peak production.

1/29/2007