Metallurgical coal production rose by 21% in over the half year to a record 26 mega tonnes, with guidance for FY15 remaining at 47Mt.

Queensland coal delivered record production and sales volumes primarily as a result of increased equipment utilisation and the successful ramp-up of the Caval Ridge mine in the Bowen Basin.

Record production was also seen at Goonyella, Daunia and Poitrel.

Thermal coal production slipped by 3% in the December half year to 36Mt, however guidance for FY15 remains unchanged at 73Mt.

The slip was attributed to drought conditions constraining volumes at Cerrejon while Navajo production declined following lower customer demand.

New South Wales production also declined thanks to lower yield material being processed and a planned wash-plant outage.

Marking a major milestone at the beginning of 2015, BHP’s Hay Point Stage Three expansion project loaded first coal on a revised schedule and budget.

On the oil and gas side, BHP Billiton said it would slash its rig count onshore in the US this year by about 40% as part of its response to lower oil prices.

The mining giant currently runs 26 rigs but plans to reduce this to 16 by June as it focuses most of its attention in the US on its Black Hawk shale project in Texas.

The reduction in drilling activity is not expected to impact the company’s 2015 financial year guidance of 255 million barrels of oil equivalent, with shale liquids volumes to rise by about 50% in the period.

“The revised drilling program will benefit from improvements in drilling and completions efficiency,” BHP CEO Andrew Mackenzie said.

“Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage. However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.”

BHP flowed record production in the first half of FY15, producing 131MMboe, a 9% increase over the 2013 corresponding period which the company said was thanks to a 71% increase in onshore US liquids volumes to 24.4MMboe.

Crude oil, condensate and natural gas liquids production increased by 24% over the first half of the 2015 financial year, while natural gas production declined by 2% to 413 billion cubic feet.

Strong gas production on the North West Shelf and Macedon facilities was countered by lower seasonal demand at the Bass Strait Longford gas conditioning plant.

The company drilled just one exploration well during the December quarter, the Perseus-1 oil well in the Gulf of Mexico, which turned out to be dry well.

Petroleum expenditure for the December half year was $US268 million ($A327 million), with guidance for the 2015 financial year forecasting a 20% reduction to the prior guidance, bringing the total expenditure to $600 million.