BHP Billiton recently announced that they plan to sell their US onshore shale assets, which include assets in the Permian, Eagle Ford, Haynesville, and Fayetteville. More than 800,000 acres of unconventional oil and gas is on the table with initial valuation estimates approaching $10 Billion according to some banking sources. As potential acquirers evaluate the opportunity to pick up significant positions in some of the best onshore shale plays, it’s a good time to look at historical results on and near BHP’s acreage.
Looking at wellhead breakeven prices for BHP’s individual wells across their operated acreage and the regional averages for all operators shows that in general BHP’s acreage is competitive, particularly their Delaware and Haynesville assets. BHP’s average oil breakeven in the Delaware is $44 WTI, over $10 lower than the all-operator average. In the Haynesville, BHP’s average breakeven is $0.35/MMBtu less than the basin average. Only their results in the Eagle Ford are currently above the all-operator average.