Resources wrap: Greek problems

AUSSIE stocks were expected to fall early this week as markets await the outcome of the Greek government’s vote on austerity measures to hold off bankruptcy.

Making resources news on Friday, Beach Energy and its partners in the Abu Sennan concession in Egypt made another commercial oil discovery, with the Al Jahraa-1 well flowing at 835 barrels per day.

Al Jahraa-1 is the third discovery in the Abu Sennan concession and is located about 15km west of the Al Ahmadi-1 and ZZ-4 discoveries.

The well reached a total depth of 3700m in the Kharita formation, with initial testing flow oil at a rate of 835bpd from the Abu Roash E target zone.

Beach said operator Kuwait Energy expected to start producing from the well as soon as all appropriate approvals had been received from regulatory authorities.

Meanwhile, high gold prices delivered a record half-year profit of $A659 million to Australia’s largest locally owned gold miner Newcrest Mining and resulted in a 20% windfall for shareholders after a 12c per share interim dividend was declared.

This compares to a 10c dividend payout in 2010 and a profit of $438 million for the 2010 corresponding period, with underlying profits of $611 million in the latest six-month period versus $523 million in the 2010 half-year.

The major difference between statutory profit and underlying profit in the current period was a $55 million gain recognised on the divestment of its Queensland assets in November last year.

Newcrest’s listing on the Toronto Stock Exchange also remains on track and is scheduled to be finalised by the end of the current quarter.

Cash flows of just over $1 billion were generated from increased gold sales of 1.21 million ounces, copper sales of 39,397 tonnes and silver sales of 1.12Moz, which in turn generated respective revenues of $1.98 million, $316 million and $37 million.

Earlier in the week, BHP Billiton’s petroleum division increased its underlying earnings before interest and tax by 38% in the first half of 2012 financial year, the biggest gain of any of the company’s businesses apart from energy coal.

Underlying EBIT for the first half reached $US3.9 billion compared to $US2.8 billion in the corresponding first half while revenue jumped almost 38% to $US6.7 billion.

Higher prices were the major contributor to the increase in EBIT and reflected a 38% jump in average realised oil prices to $US110.24 per barrel and a 35% rise in average realised LNG prices to $US14.03 per thousand cubic feet.

The average realised natural gas price remained relatively unchanged at $3.85/Mcf.

Finally, Rio Tinto has committed a further $US3.4 billion ($A3.1 billion) to take Pilbara iron ore production to 283 million tonnes per annum, as well as early works for the ultimate expansion to 353Mtpa.

The investment includes $2.2 billion to extend the life of Rio’s wholly owned Nammuldi iron ore mine by 14 years.

The first ore from the Nammuldi expansion will be delivered in the third quarter of 2014.

Rio expects to reach a production rate of 283Mtpa in the second half of next year, but ore from other mines will make up the difference until the expanded Nammuldi comes online.