BHP Billiton to sell US shale oil and gas assets to BP for $10.5 billion

The world's biggest miner BHP on Thursday announced the sale of its US shale oil and gas assets to BP for $10.5 billion, with its shareholders set for a windfall.

The Anglo-Australian firm spent $20 billion in 2011 to acquire the assets, but the sector later experienced a fall in prices, hammering profits.

It prompted BHP to announce plans to exit the business last year.

With its net debt currently towards the lower end of its target range of $10-$15 billion, the money raised is expected to be returned to shareholders.

"We are pleased that we have agreed to sell all of our shale assets in two simple transactions that provide certainty for shareholders and our employees," said BHP chief executive Andrew Mackenzie.

"The sale of our onshore US assets is consistent with our long-term plan to continue to simplify and strengthen our portfolio to generate shareholder value and returns for decades to come."

Under the deal, BP American Production Company, a subsidiary of the British giant, will acquire Petrohawk Energy Corporation, which holds BHP's Eagle Ford, Haynesville and Permian assets, for $10.5 billion.

In a separate transaction, a unit of the Merit Energy Company will buy BHP Billiton Petroleum (Arkansas) Inc. and BHP Billiton Petroleum (Fayetteville) for $300 million.

Both sales are expected to be completed by the end of October.

BHP said it expected to record a one-off post-tax charge of about $2.8 billion in its full-year results due next month on account of the deals.