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BHP Billiton to sell US shale business | BHP Billiton to sell US shale business |
(about 4 hours later) | |
Mining giant BHP Billiton will sell its US shale assets after pressure from shareholders to offload the underperforming business. | Mining giant BHP Billiton will sell its US shale assets after pressure from shareholders to offload the underperforming business. |
The miner said a number of parties are interested in the assets and it is "actively pursuing options to exit". | |
Shareholder Elliott Management has campaigned for strategic changes at BHP including the sale of its shale operations. | Shareholder Elliott Management has campaigned for strategic changes at BHP including the sale of its shale operations. |
It comes as the company reported $5.89bn (£4.56bn) annual net profit. | |
Shale assets | Shale assets |
BHP said on Tuesday that it deemed the shale business "non-core" and was exploring options to offload the assets. | BHP said on Tuesday that it deemed the shale business "non-core" and was exploring options to offload the assets. |
Chief executive Andrew Mackenzie said a number of parties are interested in acquiring its onshore US oil and gas operations, but would not name the price the company is seeking for the assets. | Chief executive Andrew Mackenzie said a number of parties are interested in acquiring its onshore US oil and gas operations, but would not name the price the company is seeking for the assets. |
BHP's entry into US shale came at the peak of the fracking boom in 2011. A slump in oil prices slugged the business and forced a $7.2bn writedown last year. | |
BHP chairman Jac Nasser, who retires this year, recently conceded a $20bn investment in shale six years ago was a mistake in hindsight. | |
Analysts have suggested the business could sell for about half that in today's market. | Analysts have suggested the business could sell for about half that in today's market. |
New-York based fund manager Elliott Management had been agitating for a sale or other form of divestment of the US shale business. | New-York based fund manager Elliott Management had been agitating for a sale or other form of divestment of the US shale business. |
The activist shareholder has publicly campaigned for a series of other changes at BHP, including the elimination of dual-structured Australia and London stock listings, and higher shareholder returns. | |
Commodity rebound | Commodity rebound |
Plans to sell its US shale operations came as the global miner posted an annual net profit of $5.89bn, following a record $6.39bn loss a year earlier. | |
The result was slightly below analysts' expectations. | |
The miner tripled its final dividend to $0.43 a share, which was also shy of expectations. | The miner tripled its final dividend to $0.43 a share, which was also shy of expectations. |
The Anglo-Australian firm, like other miners, has benefited from a rebound in industrial metals prices after a slump caused by supply gluts and economic slowdown in China. | The Anglo-Australian firm, like other miners, has benefited from a rebound in industrial metals prices after a slump caused by supply gluts and economic slowdown in China. |
China is the world's biggest buyer of commodities. | China is the world's biggest buyer of commodities. |
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