BHP Billiton Limited’s [ASX: BHP] share price has spiked by 3.66% in morning trading, after the company’s full year production report indicated some great results.
In particular, its iron ore production rose by 10% in Q4, compared to the previous quarter.
This morning’s announcement also revealed that BHP’s plan to divest its underperforming US shale oil and gas business was nicely on track and that transactions could be completed later in the year.
At time of writing, BHP’s share price is sitting at $33.69AUD.
Why is the Market in a Frenzy?
BHP have shown an increase of 2 million tonnes up on their iron ore production results from this time last year. Analysts were not expecting this.
Full year production came in at 275 million tonnes, thanks to high output across other sectors as well. Investors will be thrilled with BHP’s petroleum output, which at 192 million barrels of oil equivalent (MMboe), far exceeded market expectations. Coal and copper also went up.
‘We have delivered a strong finish to the 2018 financial year with an eight per cent increase in annual production and record output at Western Australia Iron Ore, Queensland Coal and at our Spence copper mine in Chile,’ BHP chief executive Andrew Mackenzie said.
The market will be pleased with these results, and looking forward to opportunities for profit that loom on the horizon for BHP. The company has set a production target of 273–283 million tonnes for 2017–18.
It was communicated to Reuters in June that UK oil titan BP have made an offer over $10 billion for BHP’s onshore shale assets.
What’s Next for BHP?
BHP have certainly lifted the ASX higher this morning.
While fellow mining giants Rio Tinto Limited [ASX:RIO] and South32 Ltd [ASX:S32] have also enjoyed a slight climb up by 1-1.5%, BHP is positioned as the oil and gas darling of the ASX this morning.
If the company can stay on track with its forecasting, it could be one of the top picks this year. Politics will always threaten a certain degree of volatility, but so far, the future’s looking bright for BHP.
Editor, Money Morning
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