LONDON -- BHP Billiton
BHP acquired the assets from Chesapeake Energy
BHP Billiton CEO Marius Kloppers said: "The Fayetteville charge reflects the fall in United States domestic gas prices and the company's decision to adjust its development plans by shifting drilling from dry gas to the more liquids rich fields. While we have responded appropriately to the changed market conditions today's impairment is clearly disappointing."
The mining giant was keen to highlight that its $15 billion acquisition of Petrohawk Energy in July 2011 was unaffected by this decision, and that "the development of these assets is expected to create substantial, long term shareholder value."
There was also a smaller writedown of 450 million pounds relating to BHP's nickel operations in Australia, which was attributed to a deterioration of profit margins. The combined total of the two writedowns amounts to $3.3 billion.
Given the recent attention on executive bonuses, it wasn't surprising to see that both Marius Kloppers and Mike Yeager, the CEO of BHP's petroleum division, have said they do not want to be considered for a bonus for 2012. BHP is due to announce its full-year results on Aug. 22.
The news didn't startle the market, given that BP
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Stuart does not own any of the shares listed above. The Motley Fool owns shares of Chesapeake Energy. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.