BHP increased its overall group production 9% in the six months to the end of 2014 but has decided to cut oil production in the US in response to falling prices.
The giant miner says it’s on track to deliver production growth of 16% over the two years to the end of the 2015 financial year.
In response to falling oil prices, BHP will reduce the number of onshore rigs in the US by about 40% by the end of this financial year.
“Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage,” says BHP CEO Andrew Mackenzie says.
“However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.”
Coal production increased by 21% to 26 million tonnes and iron ore in Western Australia was up by 15% to a record 124 million tonnes.
BHP and its main rival Rio Tinto have been increasing the output of iron ore despite prices dropping 47% in 2014 to about $66 a tonne.
Rio ended 2014 having shipped a record 302.6 million tonnes of iron ore, 17% higher than the year before.
Mackenzie says the company is reducing costs and improving both operating and capital productivity faster than originally planned.
“These improvements will help mitigate some of the impact of lower commodity prices and we remain alert to opportunities to further increase free cash flow,” he says.
BHP’s shares opened strongly on the ASX this morning at $28.00, up 1.89%.