BHP Billiton to sell unprofitable Fayetteville shale assets

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Source: DollarPhotoClub

The Australian BHP Billiton, one of the world’s largest mining companies, has announced plans to sell shale gas assets Fayetteville, Arkansas. It is the largest gas field in the US put on sale recently.

“As we look to improve the balance of liquids and gas across our Petroleum portfolio we have initiated the marketing (of) our Fayetteville acreage,” the chief executive of the world’s biggest miner, Andrew Mackenzie said in a statement late Tuesday. “However, we will only divest the field if it maximises value for shareholders.” BHP acquired Fayetteville from Chesapeake Energy as part of a $4.75 billion deal in February 2011.

Some commentators believe that the reason for the sale can be found in the decrease in gas prices in the US. Currently the Fayetteville deposits are valued at 2.84 billion dollars. The company’s response seems to be to concentrate on the more profitable shale liquid assets. “In the Eagle Ford and Permian (US shale assets) we are forecasting liquids production of approximately 200 thousand barrels per day by the 2017 financial year,” Mackenzie said.

“This is expected to generate significant value as investments in our liquids-rich onshore US wells typically generate returns of over 50 percent.”

The company is also planning on developing its Haynesville assets which it sees as the “premire dry asset” in its portfolio and “one of the most prolific shale gas assets in North America,” according to petroleum boss Tim Cutt.

“The Haynesville is the premier dry gas asset in our portfolio, and one of the most prolific shale gas assets in North America,” Cutt said.

BHP Billiton is a global leader in the mining industry. Founded in 2001, the company was created from the merger of the Australian Broken Hill Proprietary Company (BHP) and the British Billiton. The company is engaged in mining of bauxite, coal, copper, manganese, iron ore, nickel, uranium, diamonds, silver and titanium minerals.

BHP Billiton is also a producer of oil and natural gas. The Melbourne-head-quartered mining giant has interests in 25 countries, including Australia, Canada, Chile, Mozambique, South Africa, Colombia, Pakistan, and USA. BHP Billiton currently employs in excess of 40 thousand workers.

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