Page 258 - Annual Report 2020

5.7 Supplementary oil and gas information – unaudited continued
Standardised measure of discounted future net cash flows relating to proved oil and gas reserves (Standardised measure)
The following tables set out the standardised measure of discounted Certain key assumptions prescribed under Topic 932 are arbitrary
future net cash flows, and changes therein, related to the Group’s in nature and may not prove to be accurate. The reserve estimates
estimated proved reserves as presented in section 6.4.1 ‘Petroleum on which the Standard measure is based are subject to revision
reserves’, and should be read in conjunction with that disclosure. as further technical information becomes available or economic
The analysis is prepared in compliance with FASB Oil and Gas conditions change.
Disclosure requirements, applying certain prescribed assumptions Discounted future net cash flows like those shown below are not
under Topic 932 including the use of unweighted average intended to represent estimates of fair value. An estimate of fair
first-day-of-the-month market prices for the previous 12-months, value would also take into account, among other things, the expected
year-end cost factors, currently enacted tax rates and an annual recovery of reserves in excess of proved reserves, anticipated future
discount factor of 10 per cent to year end quantities of net changes in commodity prices, exchange rates, development and
proved reserves. production costs as well as alternative discount factors representing
the time value of money and adjustments for risk inherent in
producing oil and gas.

United
Australia States (1) Other (2) Total
US$M US$M US$M US$M
Standardised measure
2020
Future cash inflows 11,526 12,997 1,660 26,183
Future production costs (4,027) (4,943) (494) (9,464)
Future development costs (4,124) (3,242) (433) (7,799)
Future income taxes (187) (880) (473) (1,540)
(3)
Future net cash flows 3,188 3,932 260 7,380
Discount at 10 per cent per annum (642) (1,586) (94) (2,322)
Standardised measure 2,546 2,346 166 5,058
2019
Future cash inflows 18,292 18,076 1,807 38,175
Future production costs (4,710) (4,917) (459) (10,086)
Future development costs (3,860) (4,516) (226) (8,602)
(3)
Future income taxes (2,551) (1,657) (711) (4,919)
Future net cash flows 7,171 6,986 411 14,568
Discount at 10 per cent per annum (1,926) (3,396) (94) (5,416)
Standardised measure 5,245 3,590 317 9,152
2018
Future cash inflows 17,398 28,012 2,124 47,534
Future production costs (5,345) (11,182) (501) (17,028)
Future development costs (3,842) (6,554) (189) (10,585)
Future income taxes (3) (1,919) (1,236) (901) (4,056)
Future net cash flows 6,292 9,040 533 15,865
Discount at 10 per cent per annum (1,713) (3,783) (129) (5,625)
Standardised measure 4,579 5,257 404 10,240
(1) Standardised measure includes Onshore US assets of US$ nil (2019: US$ nil; 2018: US$1,932 million).
(2) Other is primarily comprised of Algeria and Trinidad and Tobago.
(3) Future income taxes include credits to be received as a result of Petroleum operations and the utilisation of future tax losses by the Group.

256 BHP Annual Report 2020