Christmas comes early for BHP shareholders

Mining giant BHP plans to return the $US10.4 billion ($14.7 billion) proceeds of the recent sale of its onshore US gas assets to shareholders through an off-market share buyback and a special dividend.

The $US5.2 billion buyback program, under which BHP can buy back shares at up to a 14 per cent discount, will start immediately. The balance of the sale proceeds, expected to be $US5.2 billion, will be paid to shareholders in January.

"We made a commitment that all the net proceeds from the disposal of our Onshore US assets would be returned to shareholders and we are honouring that commitment now that the sale
transactions have been completed. Returning this US$10.4 billion will bring the total
cash returned to shareholders to US$21 billion over the last two years,” BHP chief executive Andrew Mackenzie said on Thursday.

BHP sold its US onshore oil and shale gas business to energy giant BP and Merit Energy for $US10.8 billion, well above market expectations, in July. The resources giant had bought the assets for close to $US20 billion in 2011 at the height of the oil boom. Before the oil crash in 2014, oil and gas was BHP's second-largest earner after iron ore. It later pumped another $20 billion in capital and operating investments into the assets, which created around $US10 billion in revenue.

More to come