BHP Billiton Ltd., the largest overseas investor in U.S. shale, expects to write down the value of its onshore assets there by $2.8 billion before tax.
The gas-focused Hawkville field will account for the majority of the charge, with the remainder an impairment of goodwill from the $12.1 billion acquisition of Petrohawk Energy Corp. in 2011, the Melbourne-based producer said Wednesday in a statement.
“While the impairment of the Hawkville is disappointing, it does not reflect the quality of our broader onshore U.S. business,” BHP’s Petroleum President Tim Cutt, said in the statement. The writedown equates to about $2 billion after tax, BHP said.
BHP will cut spending on its U.S. onshore unit to $1.5 billion in the year through June 2016, supporting a development program of 10 operated rigs, from $3.4 billion in the previous year.
U.S. natural gas has dropped almost a third since the start of 2014 after four years of record supply as hydraulic fracturing opens up reserves from Texas to North Dakota. Futures for August delivery on the New York Mercantile Exchange were little changed at $2.839 per million British thermal units at 9:09 a.m. Singapore time on Wednesday.