{ "docId": "019dd923-622c-750b-8b9c-5b8ee881ff95", "docSlug": "6f0a3b154a08", "documentTitle": "BHP Billiton (BHP)", "authorId": "02_Elliott_Management", "authorName": "Elliott", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2017-04-10 00:00:00", "orientation": "landscape", "aspectRatio": 1.4444444, "pageNumber": 26, "pageCount": 39, "prevPage": 25, "nextPage": 27, "slideType": "appendix_disclosure", "function": "cite_precedent", "density": "overcrowded", "nDataPoints": 2, "notes": "The slide serves as a collection of external validation for the activist's thesis regarding the divestment of petroleum assets.", "elementsJson": [ "headline_text", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9c-5b8ee881ff95/26", "deckHref": "/decks/019dd923-622c-750b-8b9c-5b8ee881ff95", "deckJsonHref": "/decks/019dd923-622c-750b-8b9c-5b8ee881ff95.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9c-5b8ee881ff95#slide-26", "components": [ { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.88 }, "kind": "paragraph", "text": "Note: The contents of this slide shall not be taken to mean or imply (i) that the research reports referred to are a representative sample of all research reports on the topics concerned; or (ii) that the authors of the reports or their employing banks/brokers endorse in any way the Value Unlock Plan or the views set out in this presentation. We have emboldened, by way of emphasis, certain parts of the analysts' views which appear in this presentation", "attrs": null, "subkind": "disclaimer", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9f5adaac-ff2d-417e-b8de-8eeef2a07735", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.65 }, "kind": "quote", "text": "Since 2005, BHP has spent $7.9b on petroleum exploration, of which $4.9b has been expensed. However, since BHP's last prolific find with Shenzi in 2002, the Petroleum exploration team has been unsuccessful in achieving their goal of a tier 1, large scale, oil find.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "13b8f2f0-6205-4563-bba5-36fdb90525ae", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.4 }, "kind": "quote", "text": "While it is clear that the number of barrels being extracted is declining, we contend the decline is mainly driven by 'lower quality' barrels being removed from the portfolio. For instance removing US onshore shale production that carries zero or negative margins will have negligible impact on the profitability of the division. Ongoing production from the cash cow assets of NSW, Atlantis, Shenzi and Bass Strait is likely to see an improvement in per barrel margins", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "70f5c9f7-55fe-47fd-a6ab-50378ba299ae", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.75 }, "kind": "quote", "text": "On strategy, we think there is no real benefit from portfolio diversification per se and unless we see a dramatic outperformance of oil versus iron ore (clearly not the case at present) we see no reason for BHP to trade ahead of Rio Tinto.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "810fdb49-efad-4de2-9b7e-0bac4f523700", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.15 }, "kind": "quote", "text": "We have always struggled with US onshore asset as in our view they do not fit in BHP's strategy of building large scale low cost tier 1 assets and are arguably worth more to someone else.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ac64f225-2921-4cfd-934b-72cf98ecf34f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.25 }, "kind": "quote", "text": "Having run through all these scenarios and modelling, there are plenty of frustrations from a BHP analyst perspective. It may well be that BHP's Petroleum business has valuation leverage that is unique (courtesy of Onshore) but the reality is investors will, rightly, buy a pure-play oil stock - and a leveraged one at that - if they are bullish on oil. Has the time come to take the BHP devolution further than just S32? In the last 6 months S32 has outperformed its parent by >30%.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b548c5e8-5ed3-4a0f-bcc2-6b488a6bcd73", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.9, "x": 0.05, "y": 0.55 }, "kind": "quote", "text": "BHP's US Onshore assets promised so much but have delivered so little", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e4222331-1bf9-40ce-b245-dbfe60a2f386", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"We have always struggled with US onshore asset as in our view they do not fit in BHP's strategy of building large scale low cost tier 1 assets and are arguably worth more to someone else.\" — Citigroup; \"Has the time come to take the BHP devolution further than just S32? In the last 6 months S32 has outperformed its parent by >30%.\" — Credit Suisse; \"BHP's US Onshore assets promised so much but have delivered so little\" — Deutsche Bank; \"Since 2005, BHP has spent $7.9b on petroleum exploration, of which $4.9b has been expensed. However, since BHP's last prolific find with Shenzi in 2002, the Petroleum exploration team has been unsuccessful in achieving their goal of a tier 1, large scale, oil find.\" — Bank of America; \"On strategy, we think there is no real benefit from portfolio diversification per se and unless we see a dramatic outperformance of oil versus iron ore (clearly not the case at present) we see no reason for BHP to trade ahead of Rio Tinto.\" — Bernstein.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f1a-773e-97e1-2e5328bd7642", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.6, "x": 0.05, "y": 0.05 }, "kind": "title", "text": "Independent analyst comments on BHP petroleum", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fadf29d6-d145-4cc3-b5cc-bf1eed611af7", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "61e2e654-cd76-418a-be2c-2dba164adbfa", "evidence": "Use of analyst quotes to validate the activist's investment thesis.", "confidence": 0.9 } ], "arcBeats": [ { "to": 26, "from": 12, "beatId": "25288d96-a011-466d-9ef3-2ecba26c72c9", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Solution & Approach", "beatSlug": "consultants-gambit-solution-approach", "evidence": "The document proposes a three-step solution to unlock shareholder value and provides evidence and precedents to support the proposal.", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" }, { "to": 32, "from": 26, "beatId": "693a23fd-00bd-4487-a373-8c2fbddccf93", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Evidence & Proof", "beatSlug": "consultants-gambit-evidence-proof", "evidence": "The document provides additional evidence and analyst comments to support the proposal.", "position": 3, "confidence": 0.8, "parentBeatName": "Evidence", "parentBeatSlug": "evidence" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }