BHP Billiton (BHP) CEO Marius Kloppers announced the company has written down 3.3 billion on its gas and nickel assets.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Showing posts with label Marius Kloppers. Show all posts
Showing posts with label Marius Kloppers. Show all posts
Friday, August 3, 2012
Friday, June 1, 2012
BHP (BHP) Over the Long Term
Mining giant BHP (NYSE: BHP), as with most commodity companies, has been under a lot of pressure, as the ongoing weak global economy, concerns over Europe, and slowing growth in China, has investors concerned over the short - and mid-term growth prospects of the company.
A couple of major items have been weighing on the company. First is the recent announcement that the company won't be putting its money into growth projects, which it had originally expected to pour $80 billion into over the next five years.
Chairman Jacques Nasser said the $80 billion expansion proposed by CEO Marius Kloppers in 2011 won't be happening, although it isn't clear how much will go into expansion going forward.
Nasser added that he expects commodity markets to continue to weaken, as confidence in a global economic recovery deteriorates.
The second major challenges facing BHP is the uncertainty surrounding Olympic Dam project in Australia.
BHP wants to delay the development of the project, while the Australian government is threatening the company, as South Australian Premier Jay Weatherill, who appears clueless and emotionally driven, saying in the Australian National Affairs, May 25th edition, that the reasons given by BHP for the potential delay are "artificial."
This bizarre assessment appears to be completely politically motivated, as the reasons proffered by BHP are totally reasonable, and based upon market and economic conditions and nothing else.
BHP is wise and prudent in delaying the project, and the company surely won't jeopardize itself and shareholders to placate politicians.
A couple of major items have been weighing on the company. First is the recent announcement that the company won't be putting its money into growth projects, which it had originally expected to pour $80 billion into over the next five years.
Chairman Jacques Nasser said the $80 billion expansion proposed by CEO Marius Kloppers in 2011 won't be happening, although it isn't clear how much will go into expansion going forward.
Nasser added that he expects commodity markets to continue to weaken, as confidence in a global economic recovery deteriorates.
The second major challenges facing BHP is the uncertainty surrounding Olympic Dam project in Australia.
BHP wants to delay the development of the project, while the Australian government is threatening the company, as South Australian Premier Jay Weatherill, who appears clueless and emotionally driven, saying in the Australian National Affairs, May 25th edition, that the reasons given by BHP for the potential delay are "artificial."
This bizarre assessment appears to be completely politically motivated, as the reasons proffered by BHP are totally reasonable, and based upon market and economic conditions and nothing else.
BHP is wise and prudent in delaying the project, and the company surely won't jeopardize itself and shareholders to placate politicians.
Wednesday, October 27, 2010
BHP (NYSE:BHP) Should Hold Strong on Mining Tax
Opposition to the draconian mining tax in Australia helped bring down the administration of Kevin Rudd, especially with BHP Billiton (NYSE:BHP) and CEO Marius Kloppers, and the general public, opposing it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Tuesday, October 26, 2010
Should BHP (NYSE:BHP) Raise its Potash (NYSE:POT) Bid?
A lot has been made of the rise in price of corn and soybeans and its affect on the bid by BHP (NYSE:BHP) for Potash Corp. (NYSE:POT), but in truth short-term fluctuations in price have little to do with valuations of a company, and if BHP raises its bid as a growing number of people believe, it shouldn't and probably won't be based on temporary crop prices.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
Wednesday, September 22, 2010
BHP (NYSE:BHP) Says Potash (NYSE:POT) Deal Must Add Value
BHP Billiton (NYSE:BHP) CEO Marius Kloppers said he wouldn't increase the offer for Potash Corp. (NYSE:POT) to a place where it would provide good value for the shareholders of BHP (NYSE:BHP).
At the same time, Kloppers reiterated he isn't concerned about the rumor of a rival bid for Potash, as his is the only offer on the table.
Rather said Kloppers, he's focusing on navigating his way through regulatory hurdles and seeking political support in Canada.
He also reiterated that he wouldn't hesitate to walk away from the process if rival bids do emerge and they become too high.
"If somebody offers a price at which we cannot demonstrate value for
our shareholders, we're probably not going to show, and I think that
continues to be the case," Kloppers said.
Concerning what is considered one of the largest stumbling blocks, the eventual leaving of Canpotex, which is basically a price-fixing cartel, although also a marketing arm of Potash, Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), Kloppers said market-based pricing would ultimately generate more revenue than the price-fixing of the cartel.
In other words, margins aren't everything, and the increased amount of sales from market prices would surpass the higher prices set by Canpotex, in Kloppers' view.
At the same time, Kloppers reiterated he isn't concerned about the rumor of a rival bid for Potash, as his is the only offer on the table.
Rather said Kloppers, he's focusing on navigating his way through regulatory hurdles and seeking political support in Canada.
He also reiterated that he wouldn't hesitate to walk away from the process if rival bids do emerge and they become too high.
"If somebody offers a price at which we cannot demonstrate value for
our shareholders, we're probably not going to show, and I think that
continues to be the case," Kloppers said.
Concerning what is considered one of the largest stumbling blocks, the eventual leaving of Canpotex, which is basically a price-fixing cartel, although also a marketing arm of Potash, Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), Kloppers said market-based pricing would ultimately generate more revenue than the price-fixing of the cartel.
In other words, margins aren't everything, and the increased amount of sales from market prices would surpass the higher prices set by Canpotex, in Kloppers' view.
Wednesday, September 1, 2010
Potash (NYSE:POT) Downgraded by BMO Capital
BMO Capital downgraded Potash Corp. (NYSE:POT) from "Outperform" to "Market Perform."
A growing number of investors are questioning whether or not it's time to take profits with Potash, as it soared after the hostile bid from BHP Billiton (NYSE:BHP), which it rejected.
That rejection generated speculation BHP would sweeten the bid, making investors hold off to see if that would materialize.
BHP CEO Marius Kloppers has attempted to manage expectations there, saying the bid is a fair one, and implying he isn't going to acquire Potash at any cost.
Executives at Potash believe the bid is far too low, and are looking for a white knight to acquire the company, although that hasn't happened, suggesting the bid by BHP is indeed a fair one.
A new development which could challenge that are reports on Russian potash suppliers, who are attempting to raise potash prices in its Brazilian and Asian markets.
An earlier attempt this year failed to convince customers, so we'll have to wait to see if the price increases really happen.
If they do, then Potash would have a supportive argument for being vastly undervalued.
Russian potash producers pretty much guide the global potash prices through the Belarusian Potash Company, the equivalent of Canada's Canpotex, both marketing arms of the industry.
A growing number of investors are questioning whether or not it's time to take profits with Potash, as it soared after the hostile bid from BHP Billiton (NYSE:BHP), which it rejected.
That rejection generated speculation BHP would sweeten the bid, making investors hold off to see if that would materialize.
BHP CEO Marius Kloppers has attempted to manage expectations there, saying the bid is a fair one, and implying he isn't going to acquire Potash at any cost.
Executives at Potash believe the bid is far too low, and are looking for a white knight to acquire the company, although that hasn't happened, suggesting the bid by BHP is indeed a fair one.
A new development which could challenge that are reports on Russian potash suppliers, who are attempting to raise potash prices in its Brazilian and Asian markets.
An earlier attempt this year failed to convince customers, so we'll have to wait to see if the price increases really happen.
If they do, then Potash would have a supportive argument for being vastly undervalued.
Russian potash producers pretty much guide the global potash prices through the Belarusian Potash Company, the equivalent of Canada's Canpotex, both marketing arms of the industry.
BHP (NYSE:BHP) Says Potash (NYSE:POT) Assets Not for Sale
BHP Billiton (NYSE:BHP) said the rumors floating around that there are plan in place to sell off some of the assets of Potash aren't true, if they are successful with the bid for the fertilizer giant.
That is hard to believe though, as the cost to acquire Potash will probably have to be increased, and that would weigh on BHP, even though they claim they would have no need to sell off assets to shore up their balance sheet after the purchase.
A spokesman for BHP said, "Our financing is not dependent on asset sales and we do not require divestments to maintain balance sheet strength."
BHP CEO Marius Kloppers continues his mantra that the approximate $130-a-share offer is the only one made, and he is committed to remaining disciplined when it comes to the price to acquire Potash. No matter. If he wants it bad enough, we'll see the price increase even though he's attempting to downplay the possibility with a poker face.
While the company and Kloppers may not have any plans to divest of assets of Potash in place, there is sure to be some movement in that direction concerning non-core assets, even if the purpose isn't to strengthen the balance sheet. Some of them may not make sense for the company.
But there is a strong possibility the majority of the assets would remain under the BHP umbrella, as they are hungry for raw materials, and the world will continue to be once we move out of the recession, which is probably still several years away at best.
Long term this is a super deal for BHP if they can swing it, and adds to a strong, diversified portfolio of assets which will generate solid revenue and earnings for many years.
That is hard to believe though, as the cost to acquire Potash will probably have to be increased, and that would weigh on BHP, even though they claim they would have no need to sell off assets to shore up their balance sheet after the purchase.
A spokesman for BHP said, "Our financing is not dependent on asset sales and we do not require divestments to maintain balance sheet strength."
BHP CEO Marius Kloppers continues his mantra that the approximate $130-a-share offer is the only one made, and he is committed to remaining disciplined when it comes to the price to acquire Potash. No matter. If he wants it bad enough, we'll see the price increase even though he's attempting to downplay the possibility with a poker face.
While the company and Kloppers may not have any plans to divest of assets of Potash in place, there is sure to be some movement in that direction concerning non-core assets, even if the purpose isn't to strengthen the balance sheet. Some of them may not make sense for the company.
But there is a strong possibility the majority of the assets would remain under the BHP umbrella, as they are hungry for raw materials, and the world will continue to be once we move out of the recession, which is probably still several years away at best.
Long term this is a super deal for BHP if they can swing it, and adds to a strong, diversified portfolio of assets which will generate solid revenue and earnings for many years.
Friday, August 27, 2010
BHP (NYSE:BHP) Starting its Wooing of Potash (NYSE:POT) Shareholders
Marius Kloppers, CEO of BHP Billiton (NYSE:BHP) is traveling to North America to work on convincing shareholders of Potash (NYSE:POT) that a deal between the two companies would be beneficial to both companies.
Working on keeping the bidding price within a reasonable range and managing the expectations of Potash shareholders, more than likely Kloppers will focus on the value of the $130 a share he already offered while he's in the region.
He wants to dampen the idea that there is going to be a further raising of the bid in order to acquire the fertilizer company.
Even so, Kloppers has implied there will eventually be a higher offer once regulatory hurdles are taken care of, which are expected to take as long as two months.
A higher bid could bring other challenges as well, as a bid of $47 billion would require BHP to get shareholder approval, based on stock market rules in the UK. That's because any acquisition over 25 percent of the market capitalization of a company in the UK much then get shareholder approval, which the $47 billion would be.
With the size of BHP, there has been a lot of pressure from shareholders for BHP to grow, and with few acquisitions out there which would have a significant and immediate impact on their bottom line, Kloppers will work hard to get the deal done.
Other BHP shareholders are concerned over the risks associated with the deal, including the amount of debt and if the continuing recession could damper the expected demand for potash in the near term.
Working on keeping the bidding price within a reasonable range and managing the expectations of Potash shareholders, more than likely Kloppers will focus on the value of the $130 a share he already offered while he's in the region.
He wants to dampen the idea that there is going to be a further raising of the bid in order to acquire the fertilizer company.
Even so, Kloppers has implied there will eventually be a higher offer once regulatory hurdles are taken care of, which are expected to take as long as two months.
A higher bid could bring other challenges as well, as a bid of $47 billion would require BHP to get shareholder approval, based on stock market rules in the UK. That's because any acquisition over 25 percent of the market capitalization of a company in the UK much then get shareholder approval, which the $47 billion would be.
With the size of BHP, there has been a lot of pressure from shareholders for BHP to grow, and with few acquisitions out there which would have a significant and immediate impact on their bottom line, Kloppers will work hard to get the deal done.
Other BHP shareholders are concerned over the risks associated with the deal, including the amount of debt and if the continuing recession could damper the expected demand for potash in the near term.
Wednesday, August 25, 2010
BHP's CEO Won't Comment on BP (NYSE:BP) Interest
Now that BHP (NYSE:BHP) is a primary focus of the economic media, every possibility seems to be a target of inquisition, including the possibility of acquiring some assets of BP (NYSE:BP) they're shopping to raise capital to pay for mounting liabilities.
When BHP CEO Marius Kloppers was asked if they were involved with any negotiations with BP for some assets, he refused to comment, saying his primary focus now is on securing the deal for Potash (NYSE:POT).
Kloppers did say on a conference call that "beyond the acquisition of potash, our aspirations to grow the deployment of capital in the natural resources space would be undiminished," seeming to imply a lot of things are on the table.
BHP could acquire BP assets without hurting the company or increasing costs from being downgraded, as they generate a cashflow of $38.6 billion annually, with only $3.3 billion in net debt.
The company has said their goal is to maintain their A credit rating and ongoing dividend policy while they expand the business.
When BHP CEO Marius Kloppers was asked if they were involved with any negotiations with BP for some assets, he refused to comment, saying his primary focus now is on securing the deal for Potash (NYSE:POT).
Kloppers did say on a conference call that "beyond the acquisition of potash, our aspirations to grow the deployment of capital in the natural resources space would be undiminished," seeming to imply a lot of things are on the table.
BHP could acquire BP assets without hurting the company or increasing costs from being downgraded, as they generate a cashflow of $38.6 billion annually, with only $3.3 billion in net debt.
The company has said their goal is to maintain their A credit rating and ongoing dividend policy while they expand the business.
Monday, July 12, 2010
BHP (NYSE:BHP) Interested in BP (NYSE:BP) Gulf Assets
BHP Billiton (NYSE:BHP) chief executive officer Marius Kloppers recently stated he's interested in acquiring assets held by BP (NYSE:BP) in the Gulf of Mexico if they become a seller in distress.
Kloppers added that companies in these types of situations tend to hold on to their higher quality assets, implying there probably wouldn't be an interest in lower-performing units of the oil giant.
Rumors have been floating around that BHP could be interested in the Atlantis and Mad Dog fields of BP, but this seems to be unlikely in light of what Kloppers said.
"Marius said if the right assets came up at the right price, BHP would increase its exposure in the Gulf of Mexico," Morgan Stanley (NYSE:MS) analyst Craig Campbell said in a note. "That said, he noted during the global financial crisis that companies with stressed balance sheets managed to hold their tier-one assets, and he expects this will remain the case with BHP's partner in the Gulf."
Kloppers added that companies in these types of situations tend to hold on to their higher quality assets, implying there probably wouldn't be an interest in lower-performing units of the oil giant.
Rumors have been floating around that BHP could be interested in the Atlantis and Mad Dog fields of BP, but this seems to be unlikely in light of what Kloppers said.
"Marius said if the right assets came up at the right price, BHP would increase its exposure in the Gulf of Mexico," Morgan Stanley (NYSE:MS) analyst Craig Campbell said in a note. "That said, he noted during the global financial crisis that companies with stressed balance sheets managed to hold their tier-one assets, and he expects this will remain the case with BHP's partner in the Gulf."
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