BHP Billiton , the world’s largest miner, has hired Barclays and Citigroup to help it exit its underperforming U.S. shale oil and gas business, which could fetch around $10 billion, two banking sources said.
U.S. activist investor Elliott Advisors, which has built up a 5 percent stake in BHP’s London-listed arm, has urged changes including divestment of its U.S. petroleum business and ending its dual listing in Britain and Australia, to boost shareholder value.
BHP said last week it is exiting its unconventional onshore shale assets Eagle Ford, Permian, Haynesville and Fayetteville, which it acquired at the height of the oil boom. It will keep its conventional assets in the U.S. Gulf of Mexico, Australia and Trinidad and Tobago.
It said in May that its gas-rich Fayetteville field in Arkansas was under review, after attempts to sell it in 2015 were shelved due to a gap in valuations.
The miner’s entire petroleum division is valued at more than $20 billion.
BHP, Barclays and Citi declined to comment.
“The sellside advisors have only invited strategic players to bid for the onshore business at this point, which is likely to be sold in separate packages, some of which will draw more interest than others,” one source said.
Analysts put the Permian assets between $2.5 billion and $3.5 billion and the Eagle Ford asset at up to $3 billion.
“Companies like Chevron, Occidental and Exxon Mobil are all capable of doing this kind of deal, so the Permian and Eagle Ford assets will be an easy sale,” the second source said.
“Gas-rich Haynesville and Fayetteville may be less attractive,” the source added.
Source: www.mining.com
