Research archive for BIL

Out biggest and one of the most important stocks in client portfolios, BHP Billiton, announced an acquisition last evening/middle of the night. Here it is ---> BHP Billiton Announces Acquisition Of Chesapeake Energy Corporation's Fayetteville USA, Shale Assets.

BHP Billiton released their half year (and second quarter) production report this morning. And of course there will be anxieties about their coal production in Queensland, so here goes the official line from the company: "Queensland Coal (Australia) production was significantly affected by the persistent rain and flooding that impacted the Bowen Basin during the period. In the December 2010 quarter, Queensland Coal production declined by 30% when compared with the September 2010 quarter, while sales declined by 15%."

BHP Billiton have a Joint Venture in Queensland with Japanese company, Mitsubishi Development. This alliance happens to be Australia's largest coal miner and the world's largest supplier to the seaborne coking coal market. When it comes to Billiton, things don't come small. So in the short term this is not great news for BHP. Add that to huge transport delays caused by the floods.

There are these rumours around that BHP Billiton is looking to acquire Anadarko Petroleum for somewhere around the 40 billion Dollar mark. For the record in our US portfolios we used to own Anadarko. But could this just again be someone dreaming up what they would like to see. Oh, it is a nice fit I have heard some say. Anadarko are trading at a 52 week high, which is understandable, the oil price is trading at the best levels in an age. BHP Billiton bought back 114 thousand shares yesterday in London. That seems like where their focus is, but who am I?

BHP Billiton did not change their strategy between Christmas and New Year. That is all. So if anyone asks me, what are my stock picks for the calendar year 2011, the answer will be pretty much the same as last year.

b>Good to see BHP Billiton have been implementing their share buy back scheme. They bought 350 000 ordinary shares in London yesterday and although I would rather they were out there buying big Potash companies, I suppose having too much cash is a good problem to have. Talking Billiton, I think the surging copper price deserves a mention. I'm sure (hope) you read my post on Tuesday at the end where I added a link about who is buying copper. Well it pointed out that both JP Morgan and Barclays were developing ETF's for the metal. Now this isn't the only reason copper is surging but it shows extra interest in a base metal that is extremely important in the industrial process and a great proxy for growth around the globe. So the demand is definitely there. I just can't imagine the size of the warehouses used to store the physically backed ETF collateral at 410 US cents a pound!

BHP Billiton and Rio Tinto are set to stuff the Western Australian treasury coffers with 350 million Aussie Dollars each, in return for mine restrictions being lifted. It seems to me for the sharing of infrastructure by both the iron ore mining giants in the Pilbara. Rail and electricity infrastructure will be built and shared, so obviously competitions funnies wavered by WA, Perth central. Arrr, good on you mate. 'Bout that Tassie Ponting thou'......

BHP Billiton announced this morning that they have bought back 380 thousand shares in London, giving a range and basically suggesting that these shares have been retired already. Retiring is good for the existing shareholders, normally retired shares never make a comeback unless you are an exploratory mining company in which case new employees join all the time. I mean new shares. I often use that DRDGold example, where a few hundred thousand shares in issue turned into a few hundred million shares in less than 20 years. Imagine the dilution if you went to sleep for one hundred years, as in the fairy tale books. Never mind spinning wheel, try big fat spin on it.

BHP Billiton have officially withdrawn their bid for Potash Corp. The cost of the failed bid is 350 million Dollars of which 250 million will be recognized as an exceptional item at the half year stage. Wow. Talk about size and scale, perhaps they learnt something special and will proceed with developing their own potash assets a whole lot wiser. They sound more than a little bummed: "BHP Billiton continues to believe its Offer would have resulted in a significant net benefit to Canada, Saskatchewan and New Brunswick." So there Canada.

Our major listed mining company, BHP Billiton soared yesterday as the Canadian authorities decided that a hands-off our Potash approach was one which they would project. Even though they (Investment Canada) were happy to say that they were open for business. Hmmm... BHP Billiton was amongst the top gainers yesterday, the stock up a whopping 6.15 percent to 26750. As you can imagine there were many a folk short BHP Billiton and long Potash Corp. in anticipation of the deal being rubber stamped by authorities (if not more importantly shareholders) and more importantly BHP Billiton coming back with more. So caught on both sides of the equation squeezed out of those shorts and forced to close the Potash longs, which did better than I thought that they would, the stock down only 2.4 percent to close at 141.97.

OK, this was a BIT of a surprise, Investment Canada, who had only turned away one deal in the last 25 years have REJECTED BHP Billiton's bid to take out Potash Corp. Wow. It was always going to be the shareholders, in my opinion that would ultimately decided this, I did not expect a no vote, that was a surprise of sorts. I had read a day or two ago from a research report that the only other deal turned down by Investment Canada was a deal from the outside to acquire a satellite military technology company of sorts. So, this deal suggests to me that food security is right up there with Military technology.

The BHP Billiton production and exploration report for the first quarter of their financial year was out this morning. The expectations were for lower petroleum production, as a ban on new drilling in the gulf of Mexico took effect, but this was not the case. As per the Production report: "Record quarterly Petroleum production despite the suspension of drilling activities in the Gulf of Mexico (USA). This was driven by strong crude performance at Pyrenees (Australia) and strong liquefied natural gas production at North West Shelf (Australia)."

Thanks Tom, thanks Marius, but sorry. The iron ore JV in the Pilbara between the two mining majors, BHP Billiton and Rio Tinto is officially off. Reason is the one that we thought might always be the toughest to overcome, the competitions and anti-trust hurdles to overcome were just too much. The idea was simple, the infrastructure would be shared and there would be cost savings of 10 billion US Dollars. The idea was that BHP Billiton would pay Rio Tinto 5.8 billion US Dollars to measure up to what would then be a 50/50 iron ore venture in the Pilbara, Western Australia. Port and railroad infrastructure would be shared and assets pooled.

The Pilbara looks like the surface of the moon. It is red and full of iron ore, and a massive JV of sorts was supposed to take place between the two mining titans of Australia, BHP Billiton and Rio Tinto. In a way Rio Tinto were saved by the bell, even though they had to come back to shareholders with a deep begging bowl, and raise a whole lot of money at a deep discount, the regulatory authorities shoed Chinalco away with a long stick. You can't own this Aussie asset, even if you are a big customer you Chinese folk. The irony of that is that the current finance minister down under is an Australian with a minority background, her name is Penny Wong, her father was of Cantonese extract, her mother Australian. Penny is a new Australian I guess.

Our favoured commodity stock, BHP Billiton is preferred by the Canadian government. Would you believe that? Or at least according to the Sydney Morning Herald. Sydney Mourning the cricket loss in India this morning, well done to VVS and the gang for pulling a rabbit out of the proverbial hat. Check this out: Canada govts may back BHP's Potash bid. OK, we keep tabs on this one, I am STILL WAITING for Sinochem. Or anyone. As are the board of Potash Corp. we are led to believe.