BHP Billiton upbeat despite hit on gas

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LONDON, Aug. 3 (UPI) -- Though lower U.S. natural gas prices have hurt the company, BHP Billiton said it remained upbeat given technological developments in the shale industry.

BHP Billiton, in its second quarter earnings report, said it took a $2.84 billion charge, before tax, on shale gas assets acquired by Chesapeake Energy in 2011.

Oil prices have slumped amid uncertainty regarding the health of the global economy, particular the eurozone. U.S. natural gas prices have fallen in part because of the boom in shale.

BHP Billiton Chief Executive Officer Marius Kloppers said the consequences of domestic natural gas prices in the United States were "clearly disappointing."

Nevertheless, he said, natural gas, as a low-carbon alternative, would eventually play out for the company.

"The board remains of the view that the investment in the US shale assets is the right decision for BHP Billiton shareholders," added Chairman Jac Nasser in a statement.

The U.S. Energy Department's Energy Information Administration this week reported that proven U.S. natural gas reserves passed 300 trillion cubic feet for the first time history in 2010 and total 317.6 tcf.

The EIA attributed much of that growth to developments in hydraulic fracturing and horizontal drilling that increases shale potential.