All posts by Adrian Prendergast

Adrian Prendergast

BHP Group: OD expansion set for another reboot

By Adrian Prendergast

20 October 2020, 2:58 PM

BHP has shelved the most recent plan to expand Olympic Dam (BFX), with subsurface drilling in the southern mining area failing to confirm results from earlier surface drilling. The reality is copper assets are hard to come by, and when combined with BHP’s history at Olympic Dam, we do not believe BHP will suddenly take a ruthless approach to the big mine’s position in its portfolio despite its long-held poor performance and low potential for improved returns. This leaves us somewhat confused on BHP’s overarching strategy of “value over volume”.

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BHP Group: Moves counter-cyclically

By Adrian Prendergast

28 October 2020, 12:00 AM

BHP is acquiring an increased stake in Shenzi in Gulf of Mexico for US$505m. Adds 52mmboe of reserve (2P+2C) and ~11kboepd to production. Hess needed to divest the stake to fund development elsewhere, with earnings depressed. BHP is taking advantage of the cycle with an opportunistic value accretive bolt-on acquisition, taking its interest in Shenzi to 72%. We maintain our Hold rating with a revised target price (login to view target price).  Opp...

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Oil and Gas: A plan to have a plan

By Adrian Prendergast

22 September 2020, 9:25 AM

We see the oil & gas sector as a Covid-exit trade that has so far been overlooked. Given market jitters around energy, we expect a broad sector re-rating to trail some other key Covid trades. This has left us favouring those oil & gas players with defendable (low risk) earnings platforms and healthy balance sheets.

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