BHP Billiton hires Barclays and Citi for US shale gas sale

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BHP Billiton (LON:BLT) has hired Barclays and Citigroup to help it exit its underperforming US shale oil and gas business, Reuters has reported. The move comes after the Anglo-Australian miner recently revealed that it was planning to exit its US shale business, amid pressure from activist investor Elliott Management.

BHP Billiton’s share price has been steady in London this morning, having added 0.58 percent to 1,485.00p as of 08:44 BST, slightly outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.24 percent higher at 7,448.67 points. The group’s shares have added just under 52 percent to their value over the past year, and are up by some 13 percent in the year-to-date.

Sources with knowledge of the matter told Reuters yesterday that BHP had hired Barclays and Citigroup to help it exit its underperforming US shale oil and gas business, which could fetch around $10 billion (£7.76 billion).

“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 told the newswire. Another source meanwhile noted that 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”.

“Gas-rich Haynesville and Fayetteville may be less attractive,” the source added, as quoted by Reuters.

The news comes after BHP recently said that it was “actively pursuing options to exit” its US non-shore assets. The blue-chip miner is further planning to sell its Nickel West division, which operates in Western Australia, and was stranded as an orphan asset after it was not included in the FTSE 100 miner’s spin-off of South32.

As of 09:08 BST, Friday, 01 September, BHP Billiton plc share price is 1,482.00p.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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