BHP Billiton has flagged a $US2.8 billion ($A3.76 billion) hit to its full year results due to asset writedowns in its US shale oil operations.
The mining giant has announced pre-tax writedowns of $US2.8 billion, or about $US2 billion post tax, mostly linked to its Hawkville operations in Texas.
But the company says the move does not reflect the underlying quality of its US operations and it plans to invest $US1.5 billion in the business in the 2016 financial year.
BHP Billiton petroleum president Tim Cutt said the company’s other US operations were sound.
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“While the impairment of the Hawkville is disappointing, it does not reflect the quality of our broader onshore US business,” he said in a statement to the ASX.
“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.
“With industry-leading drilling costs and recoveries, we are well-positioned to realise significant value for shareholders as we develop our high-quality resource base.”
– with AAP
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