It has been almost three years since the firm last updated on its conventional and onshore assets – and a lot has changed in that time. The business is the second-largest contributor to profits.
Onshore BHP has curtailed “activity significantly” to “preserve value”, UBS said. It added the business has potential in the medium-term, presumably when the oil price rises well above US$50 a barrel.
Its offshore oil fields, meanwhile, are a “cash-flow generator”; exploration success is likely to be the “key catalyst”, UBS said.
The Swiss bank expects investment to be US$800mln in 2017 with reserves depleting.
However its £12 a share target price doesn’t leave much room for growth. BHP opened £11.60.
Story by ProactiveInvestors