Australia-based BHP Billiton Ltd. is putting its Fayetteville Shale assets on the sales block, leaving a multi-year misadventure in Arkansas behind it as the company’s petroleum business focuses on higher-value U.S. liquids production.

“In petroleum, the group continues to prioritize value over volume, which dictates a focus on onshore U.S. liquids development and investment in high-return brownfield projects across the conventional business,” said CEO Andrew Mackenzie during an investor presentation Monday.

“In the Eagle Ford and Permian [Basin], we are forecasting liquids production of approximately 200,000 b/d by the 2017 financial year. This is expected to generate significant value as investments in our liquids-rich onshore U.S. wells typically generate returns of over 50%.”

The company has been talking about its 200,000 b/d target since last year (see Shale Daily, Dec. 11, 2013), and BHP has indeed been growing U.S. onshore output (see Shale Daily, July 23).

“In time, we expect to fully develop our Haynesville gas field given the quality of our acreage,” Mackenzie said Monday. “As we look to improve the balance of liquids and gas across our petroleum portfolio, we have initiated the marketing our Fayetteville acreage. However, we will only divest the field if it maximizes value for shareholders.”

In early 2011 BHP acquired Chesapeake Energy Corp.’s Fayetteville Shale portfolio for $4.75 billion in cash (see Shale Daily, Feb. 23, 2011). Later that same year, the head of the company’s petroleum unit boasted that BHP was in “shale of the shales” with its holdings in the Fayetteville as well as the Haynesville, Eagle Ford and Permian Basin (see Shale Daily, Nov. 17, 2011).

But it wasn’t long after that when things had gotten out of hand in Arkansas. Weak natural gas prices drove BHP to take a US$2.84 billion pre-tax charge against the value of dry gas assets in the Fayetteville (see Shale Daily, Aug. 7, 2012). “The Fayetteville charge reflects the fall in United States domestic gas prices and the company’s decision to adjust its development plans by shifting drilling from dry gas to the more liquids-rich fields,” then-CEO Marius Kloppers said at the time.

BHP’s acquisition of Petrohawk Energy Corp. for $12.1 billion in 2011 (see Shale Daily, July 18, 2011) also went pear-shaped in 2012 with the downturn in natural gas prices (see Shale Daily, Aug. 13, 2012).

However, on Monday Mackenzie said an efficiency drive has improved productivity. In the petroleum business, forensic benchmarking of every component of the company’s onshore U.S. drilling program has “significantly improved capital productivity,” Mackenzie said. “Drilling costs in the Black Hawk fell 16% in the 2014 financial year. Onshore U.S. operating costs are also expected to improve with a 10% reduction forecast in the 2015 financial year.”