BHP Billiton Projects US$2 Billion US Petroleum Asset Write-down

BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) announced that it expects to recognize a US$2 billion post-tax impairment charge against the carrying values ot ifs offshore US assets as an exceptional item in the 2015 fiscal financial year results.
As quoted in the press release:

The gas focused Hawkville field accounts for the substantial majority of this charge reflecting its geological complexity, product mix, acreage relinquishments and amended development plans. The remainder relates to the impairment of goodwill associated with the Petrohawk acquisition.
Following this impairment, the Group’s Onshore US business will have net operating assets of approximately US$24 billion¹. The value of this business is supported by ongoing cost reductions and improving well performance which help offset increased commodity price volatility and lower near term capital expenditure. Consistently positive results from the appraisal and development of the Permian have also unlocked significant value and we now see the ultimate potential of this field at over 150 kboe/d (up from our previous estimate of 100 kboe/d).

Tim Cutt, president of BHP Billiton, commented:

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. 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.

Click here to read the full BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) press release.