BHP Billiton (LSE: BLT) bosses will also give up their bonus.
BHP Billiton (LSE: BLT) announced a large write-down of its North American shale gas assets today, due to continued low gas prices in the US.
BHP acquired the assets from Chesapeake Energy (NYSE: CHK.US) for $4.75bn in February 2011. Now, just 18 months later, it's writing them down by $2.84bn, which is almost 60% of the original purchase price.
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 $15bn 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 write-down of £450m relating to BHP's nickel operations in Australia, which was attributed to a deterioration of profit margins. The combined total of the two write-downs amounts to $3.3bn, or £2bn.
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 later this month, on 22 August.
The news didn't startle the market, given the fact that BP (LSE: BP) took a similar $5bn charge when it announced results earlier this week. In fact, BHP shares rose 0.5% in early trading to 1,868p.
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> Stuart does not own any of the shares listed above.
