Australia-based BHP Billiton warned Wednesday that it will take a $2 billion write down on the value of its U.S. oil business.
According to the Wall Street Journal, the majority of the post-tax write down is tied to the Hawkville shale gas field after the asset’s development proved to be more complex and costly than anticipated.
BHP acquired the field when it purchased Petrohawk Energy Corporation in in 2011.
The charge will be recorded as an exceptional item in BHP’s results for the year through June 30 and could reach $2.8 billion before tax, the Wall Street Journal said.
“While the impairment of the Hawkville is disappointing, it doesn’t reflect the quality of our broader onshore U.S. business,” BHP petroleum president Tim Cutt told the paper.
In January, the company said it would slash its U.S. onshore rig count down to about 16 from 26 by the end of June.