BHP Billiton plans to sell it’s shale gas shares, according to Business Insider

Acquired in February 2011 from Chesapeake Energy for $4.75 Billion, “We have initiated the marketing (of) our Fayetteville acreage…[but] will only divest the field if it maximises value for shareholders” Says BHP Billiton chief executive Andrew Mackenzie. Bids will only be considered if they are above the floor price

The move marks an attempt to “improve the balance of liquids and gas across our petroleum portfolio” and focus on more profitable areas in the shale gas industry; “The chances for us to develop it in the near term are very low to non-existent, and therefore it should be worth a lot more to someone… who is more obviously a natural owner.” says Mackenzie

The move comes after the US$2.84 billion writedown in August 2012, which occurred after shale gas prices plummeted. Other areas of interest are the Eagle ford, Permian, and Haynesville shale assets.

More profit, less shale gas?

BHP Billiton has signalled commitment to move towards liquid gas products, with an annual investment of US$4 billion into petroleum, “BHP is maintaining its message on petroleum…[the investment is]…a big chunk of their omitted growth,” reveals Liberum analyst Richard Knights.

Instead, BHP will continue to look to other high profitability areas, “investments in our liquids-rich onshore US wells typically generate returns of over 50 percent.” Shale liquid assets such as Eagle Ford and Permian are currently the highest potential areas under consideration, “In the Eagle Ford and Permian (US shale assets) we are forecasting liquids production of approximately 200 thousand barrels per day by the 2017 financial year,” says Mackenzie

However, BHP has not completely abandoned the dry gas markets, with plans to develop the Haynesville shale gas site in Louisiana; “ The Haynesville is the premier dry gas asset in our portfolio, and one of the most prolific shale gas assets in North America…[and]…we are moving towards full development now, and we will be in full development during the five-year plan.” said Tim Cutt, President, Petroleum and Potash at BHP Billiton

BHP Billiton (DLC) is a leading global resources company, headquarterd in Melbourne, Australia. BHP Billiton Plc is located in London. BHP has a primary listing on the Australian Securities Exchange and BHP Billiton Plc has a premium listing on the London Stock Exchange