Australian energy and mining giant BHP Billiton said Thursday it was on pace start selling off its U.S. shale assets during the first quarter of the year.

In August, CEO Andrew Mackenzie said the company determined that its U.S. shale assets were not core parts of the portfolio. In a performance review for the six months ending in December, it said its exploration and production activity was stable, but it was looking for the exit door.

"We continue to progress a number of alternatives to exit our onshore U.S. assets for value," the review read. "We are preparing all appropriate documentation ahead of data rooms being opened to potential trade sale buyers by the end of the March 2018 quarter."

The move comes as U.S. shale oil production is on pace to break records at 10 million barrels per day in 2018. The head of the International Energy Agency, Fatih Birol, told U.S. Senate leaders this week that U.S. production growth rates were unrivaled.

BHP spent $336 million total on U.S. onshore and development during the second half of 2017 and spending targeting the more lucrative basins, like the Permian shale in Texas, was unchanged from the same period in 2016.

Nevertheless, the company said it was adjusting its capital plans to accommodate the planned exit from U.S. shale.

Total U.S. onshore production for the period was 35 million barrels of oil equivalent per day, down 13 percent from the previous year. Its full-year 2018 guidance of 61 million boe at the low end was left unchanged from previous estimates.

While U.S. shale oil production is accelerating, the energy landscape is changing. Last year, Eduard Haegel, the company's president in charge of operations at its Nickel West mining operation, said the company would capitalize on the growing need for minerals needed to produce batteries for electric vehicles. Identified once as a non-core asset, the company said it was shifting gears toward the production of sulphates in a multi-million dollar overhaul.

Oil remains, however, in BHP's portfolio. While selling off some of its minor holdings in assets in the U.S. waters of the Gulf of Mexico, the company still holds a 65 percent interest in the Scimitar project off the U.S. coast and expects results from a drilling program later this year. Its $800 million planned for conventional operations in the United States includes an investment in the Mad Dog project, where production of around 140,000 barrels of oil per day is expected in 2021.

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(UPI) Jan 17, 2018
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