BHP takes $1.8B charge on U.S. tax overhaul

BHP takes $1.8B charge on U.S. tax overhaul

Feb. 13 (UPI) — Australian energy and mining company BHP Billiton said Tuesday it’s anticipating a $1.8 billion charge on U.S. tax code changes, but expects long-term benefits.

U.S. President Donald Trump signed the Tax Cuts and Jobs Act at the end of December. The measure, which permanently cuts taxes for corporations from 35 percent to 21 percent, passed out of the House and Senate along party lines.

BHP Billiton said it would post the expense as an exceptional item when it posts its financial results on Feb. 20.

“The U.S. tax reform will have a positive impact on the group’s U.S. attributable profits in the longer term mainly due to the lower corporate tax rate,” the company offered in its statement.

BHP spent $336 million total on U.S. onshore and development during the second half of 2017 and spending targeting the more lucrative basins, like the Permian shale in Texas, was unchanged from the same period in 2016.

Nevertheless, the company said it was adjusting its capital plans to accommodate the planned exit from U.S. shale. CEO Andrew Mackenzie said last year the company had determined that its U.S. shale assets were not core parts of the company’s portfolio.

Oil remains in BHP’s portfolio, however. While selling off some of its minor holdings in assets in the U.S. waters of the Gulf of Mexico, the company still holds a 65 percent interest in the Scimitar project off the U.S. coast and expects results from a drilling program later this year. Its $800 million planned for conventional operations in the United States includes an investment in the Mad Dog project, where production of around 140,000 barrels of oil per day is expected in 2021.