BHP Billiton has put its Fayetteville shale gas assets in the United States back on the block as it seeks to focus on more lucrative opportunities in oil.
BHP first tried to sell the Fayetteville assets more than two years ago, having made the shale gas investment in 2011 and has since written down its value by billions of dollars.
But it shelved the idea of a sale in February 2015, saying at the time it planned to “maximise value” of the assets. BHP valued the business at $US919 million ($1.22 billion) at the end of 2016, according to its annual accounts.
In a corporate operations review published on Wednesday, BHP said the gas-rich Fayetteville field in Arkansas was under review and that it was now “considering all options, including divestment”.
Macquarie Bank analysts in a note said divestment of Fayetteville was the most likely course of action.
Analysts have linked the revived sale to activist investor Elliott Management’s call earlier this month for BHP to spin off its petroleum division, much as BHP did with the aluminium and other non-core operations when it created South 32 in 2015.
BHP has rejected the call by Elliott, which claims to hold a 4.1 percent interest in BHP’s U.K-listed shares.
BHP on Wednesday denied any link between Elliott’s move and prospects for Fayetteville including divestment, and said the move was instead part of an ongoing review.
Within the petroleum business, BHP has long made it clear it intends to focus on liquid products in the United States, a more lucrative business than dry gas.
In February, it agreed to spend $2.2 billion to fund its share of investment for the second phase of the Mad Dog oilfield in the Gulf of Mexico.
BHP also reported a 20 per cent drop in nine-month copper production and cut its full-year production guidance due to industrial action at its Escondida mine in northern Chile.
The global mining giant says 44 days of industrial action in the nine months to March 31 pushed it to cut its guidance to between 1.33 million and 1.36 million tonnes – down from 1.62 million to 1.66 million tonnes outlined in January.
Iron ore production for the same period was up 3 per cent at 171 million tonnes.
Damage to rail infrastructure in Queensland from Cyclone Debbie reduced metallurgical coal production guidance by 9 per cent to between 39 million and 41 million tonnes, and narrow its iron ore output guidance to 268 million to 272 million tonnes.