BHP Billiton takes $2bn impairment charge on US shale assets

BHP Billiton has taken $2bn impairment charges on its US onshore petroleum assets after one of its Texas gas field became more costly to develop.

The company said that majority of write down will be related to Hawkville gas project in South Texas, as the project become costlier than estimated.

BHP Billiton acquired Hawkville field in 2011 as part of $12bn acquisition of Petrohawk Energy.

Cost of the Hawkville field increased due to geological complexity, product mix, acreage relinquishments and amendment to development plans.

BHP Billiton Petroleum president Tim Cutt 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.

"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."

After the writedown, the company will still have onshore assets of about $24bn in the US.

The company plans to invest further $1.5bn in the assets in the 2016 financial year to support the development of ten operated rigs.