BHP Billiton Faces $ 5 Bln Loss On Shale Gas Deals

BHP Billiton PLC BHP +0.56% faces a $5 billion loss on shale gas deals, and barring a dramatic recovery, may have to slash the value of its assets.

“On the back of six months of bad prices they are not likely to cut [the valuation] in half,” said Richard Knights, an analyst at Liberum Capital. “A 25% reduction–$5 billion–is probably towards the top end.”

The possible writedown comes after two poorly-timed acquisitions in the U.S. Since Chief Executive Officer Marius Kloppers paid $20 billion to gain a foothold in America’s shale gas industry the price of gas in the U.S. has more than halved, , the Sunday Times reported.