BHP Billiton Limited looks to offload US shale assets

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.

1 Massive Dividend Stock to Buy Today (7.9% Current Gross Yield!)

FREE REPORT! Click here to discover the Motley Fool's #1 ASX dividend recommendation - currently paying a 7.9% gross yield!

Even better, this 'under the radar' consumer play is growing like gangbusters. Shares have rocketed 100% in the last 5 years, DOUBLING shareholders' investment. So what's not to like?

Simply click here to grab your free copy of this up-to-the-minute research report right now.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.