BHP Billiton’s signboard outside Richards Bay. Picture: SUNDAY TIMES
BHP Billiton’s signboard outside Richards Bay. Picture: SUNDAY TIMES

BHP Billiton said on Friday it expects to incur a post-tax impairment charge of $4.9bn against its US onshore energy assets.

The charge comes at a time where falling oil and gas prices are putting pressure on energy companies.

Earlier this week, Brent oil fell to below $30 a barrel, reaching a fresh 12-year low, amid concern about swelling US inventories and increased Iranian output.

"Oil and gas markets have been significantly weaker than the industry expected," BHP Billiton CE Andrew Mackenzie said.

"While we have made significant progress, the dramatic fall in prices has led to the disappointing write-down announced today. However, we remain confident in the long-term outlook and the quality of our acreage," he said.

BHP said the charge would reduce the net value of its onshore US assets to about $16bn.

Looking ahead, the company would cut the number of operated rigs in its US business from seven to five in the March 2016 quarter.

"Beyond this, investment and development plans for the remainder of the 2016 financial year are under review, with a focus on preserving cash flow," the company said.

The write-down will be recognised as an exceptional item in its results for the six months to December 31 2015.

Pengana Capital fund manager Ric Ronge said BHP was caught in the perfect storm.

"It wasn’t unexpected that there would have to be some write-downs here — the unexpected part is that the oil price got to this level," said Mr Ronge.

He said a much more important issue in investors’ minds was the fate of the dividend.

"Its dividend policy is a more pressing issue that management has to address," he said.