Two conflicting events placed BHP Billiton Ltd ( BHP - Analyst Report ) on a delicate ground this week. On the positive, the company received funding approval for a spar facility project. Undermining the optimism was the closure of its Norwich Park coal mine.

Yesterday, BHP Billiton announced the approval of US$708 million initial funding for Mad Dog Phase 2 project in the deepwater Gulf of Mexico. The pre-commitment funding will facilitate detailed engineering and the procurement of hull, topsides and subsea equipment.

The proposed Mad Dog Phase 2 project – a partnership between operator BP ( BP - Analyst Report ) , 60.5% share), BHP Billiton (23.9%) and Chevron ( CVX - Analyst Report ) , 15.6%) – includes development of a second spar facility with all subsea production and injection wells.

As per the agreement, the new facility will be constructed with a design capacity of approximately 130,000 barrels of oil per day to be exported via the Mardi Gras Pipelines. The first production is scheduled for calendar year 2018.

The US$708 million funding — a strategic part of BHP Billiton’s extensive organic growth program — is not only expected to generate positive business under all market conditions but will also provide the company an edge over its peers, such as Vale S.A ( VALE - Analyst Report ) and Alcoa Inc ( AA - Analyst Report ) .

In a separate story, BHP Billiton Mitsubishi Alliance (BMA) announced its intention to cease production at the Norwich Park coal mine for an indefinite period. A seven-week mine viability review revealed that lower production, significant increase in mining costs and lower coal prices led to losses.

The company has decided against resuming operations but expressed its commitment to maximize redeployment opportunities for the employees till the time Norwich Park is reinstated as a sustainable and profitable low-cost mine.

BHP Billiton’s pipeline of high-return growth projects, business diversifications as well as substantial increase in production of metals and energy appear encouraging. Nevertheless, execution risks like natural calamities, upsurge in oil prices, rising core inflation in the emerging markets and degradation of ore grade clouds such encouraging outlook. Thus we currently hold a long-term Neutral recommendation on the stock.

Also, BHP Billiton carries a Zacks #3 Rank, which translates into a short-term (1-3 months) Hold rating.