Resources, Energy - BHP To Quit Shale
Anglo-Australian mining giant BHP Billiton is "actively pursuing options" to get out of the shale oil business, bowing to pressure from shareholders to offload the under-performing sector.
The company bought US oil and gas assets six years ago at the height of the boom when oil prices were above US$100 a barrel. But oil prices are struggling to recover above the $50-a-barrel level, and activist investors including billionaire Paul Singer's Elliott Advisors want BHP to get out; spinning off the shale unit could raise as much as $11 Billion.
"We have determined that our onshore US assets are non-core and we are actively pursuing options to exit these assets for value," the company said on Tuesday.
In a conference call, BHP Billiton chief executive Andrew Mackenzie clarified: "We think our best option at the moment is trade sales; we will keep a number of other mechanisms for exit open where perhaps the timing could be a little quicker."
Overall, strong commodity prices and cost-cutting did well for BHP. The company reported underlying earnings of $6.7 Billion in the twelve months that ended in June.