BHP Billiton Writes Down Shale Assets

Global mining giant BHP Billiton said Friday it’s writing-down the value of its U.S. shale assets by $7.2 billion pre-tax due to the ongoing price plunge in crude oil and natural gas.The huge impairment charge is the third BHP has taken due to the company’s push into shale in 2011, when it spent $20.6 billion (including assumed debt) on two acquisitions at a time when oil and gas prices were much higher than now. Oil and gas markets have been significantly weaker than the industry expected, said Andrew Mackenzie, BHP’s chief executive. The impairment charge will reduce the value of BHP’s onshore US operating assets to roughly $16 billion, including deferred tax liabilities, Kallanish Energy finds.Due to the collapse in oil prices over the past 18 months, BHP has chopped its operating costs and capital spending in the U.S., and reduced the number of rigs from 26 to five by March 31. While we have made significant progress, the dramatic fall in prices has led to the disappointin
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