BHP process to unload US shale operations could take until 2019

The planned exit of BHP Billiton Ltd from its US shale business has drawn oil companies and private equity firms into a competition that may have no clear winner until late this year or early next year, according to people familiar with the negotiations.

BHP, the world's largest miner, said in August that it would exit its US shale oil and gas business after pressure from activist hedge fund Elliott Management, which owns a stake in the company and argued the unit was a drag on BHP's value.

The Anglo-Australian company's Houston-based BHP Petroleum unit holds more than 838,000 acres spread across four US shale plays: Texas' Permian and Eagle Ford basins and the Haynesville and Fayetteville formations of Arkansas. A divestiture of all of that land would be among the largest shale acreage sales to date.

BHP is offering to sell off acreage in seven different packages spanning three formations; it has generated interest from oil companies that paired with private equity firms to bid on all the assets, as well as from companies looking at individual packages.

First bids were received last week, but no deal is expected until very late in 2018 or early 2019, according to two of the people familiar with the matter who, like all the sources, could not speak for attribution as the negotiations are not public.

It was currently unclear whether BHP may hold a second bid round with certain bidders or all of them, or it may opt to continue weighing the received bids toward securing a preferred deal.

The long delay can be explained by the sheer scale of the process and the number of parties involved, although bankers have also been critical of BHP's approach which has been regarded as slow-moving throughout.