BHP Billiton Limited (ASX: BHP) has reportedly engaged with Barclays with a goal to sell some of its US shale gas assets.
The news was reported by The Australian Financial Review today, stating that BHP had hired the financial services company to divest its US Fayetteville assets. The miner had already stated that the assets were under review and would seek to sell some acreage, which coincided with pressure from an activist group to demerge the US petroleum assets.
Unfortunately, Fayetteville has acted as a burden for BHP since it was acquired by the miner in February 2011 for US$4.75 billion. It contributed negative US$134 million to BHP's underlying earnings (EBIT) in the 2016 financial year, based on revenue of US$246 million, while it was also charged with a US$1.91 billion impairment for the year. It had net operating assets of US$919 million as at the end of December 2016.
Indeed, much of this has been caused by lower oil prices, which crashed between mid-2014 and early-2016. They have rebounded in the time since which could allow BHP to realise a higher price on a sale, should it follow through with its plans.
The BHP Billiton share price is currently fetching $24.32, down from a 52-week high of $27.95. Personally, I think there are better investment opportunities available to investors today.
