The share price of mining giant BHP Billiton Limited [ASX:BHP] has risen by over 2% in early morning trading, and is currently up by 1.90%.
This excitement has been prompted by a company announcement today, revealing that BHP will sell its onshore US oil and gas assets for US$10.8 billion.
What’s the story?
Bids were received earlier in the year, according to Bloomberg, from oil giants BP, Chevron and Royal Dutch Shell in partnership with private equity firm Blackstone.
Today’s release has announced that BHP has entered into agreements for the sale of its entire interests in the Eagle Ford, Haynesville, Permian and Fayetteville Onshore US oil and gas assets.
The sale will go ahead pending the parties pass customary regulatory approvals and conditions of the sale. The transaction is expected to be complete by the end of October 2018.
What does this mean for investors? Well, according to BHO’s CEO Andrew Mackenzie, only good things…
He has stated that:
‘With net debt currently toward the lower end of our target range of US$10 to US$15 billion, and consistent with our Capital Allocation Framework, we expect to return the net proceeds from the transactions to shareholders. We will confirm how, and when, at the time of completion of the transactions.’
What does the future hold for BHP?
At time of writing, the share price is sitting at $34.28.
Earlier this month, Mackenzie said at a mining conference:
‘BHP is set-up for future success. We have a simple, unique portfolio of the very best assets, diversified across attractive commodities.’
BHP has vowed to continue to target a further US$2 billion in productivity gains by the end of the 2019 financial year.
And with the paycheck boosts that are likely in store for BHP’s shareholders, this stock remains one of the most attractive mining picks on the ASX.
Editor, Money Morning
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