15th Jul 2015 05:27
MELBOURNE (Alliance News) - Mining giant BHP Billiton PLC said Tuesday that it expects to write down the value of its onshore US assets by about USD2 billion post-tax in its financial results for fiscal 2015.
BHP Billiton noted that the gas-focused Hawkville field accounted for the majority of this impairment charge, reflecting its geological complexity, product mix, acreage relinquishments and amended development plans. The remainder of the charge relates to the impairment of goodwill associated with the Petrohawk acquisition.
After the writedown, BHP Billiton's onshore US business will have net operating assets of about USD24 billion.
Tim Cutt, BHP Billiton Petroleum President said, "While the impairment of the Hawkville is disappointing, it does not reflect the quality of our broader Onshore US business. The Black Hawk continues to exceed expectations, the Permian offers significant upside across multiple zones and the Haynesville, one of the industry's premier dry gas positions, provides an excellent development option as market conditions improve."
BHP Billiton said that in fiscal 2016, it plans to invest USD1.5 billion in the onshore US business, noting that the investment will support a development program of 10 operated rigs.
At an oil price of USD60 per barrel and a gas price of USD3.00 per Mscf, BHP Billiton expects its onshore US business to be free cash flow positive in the 2016 financial year.
Copyright RTT News/dpa-AFX
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