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By Jessica Resnick-Ault and David French
NEW YORK, June 4 (Reuters) - The planned exit of BHPBilliton Ltd from its U.S. shale business hasdrawn oil companies and private equity firms into a competitionthat may have no clear winner until late this year or early nextyear, according to people familiar with the negotiations.
BHP, the world's largest miner, said in August that it wouldexit its U.S. shale oil and gas business after pressure fromactivist hedge fund Elliott Management, which owns a stake inthe company and argued the unit was a drag on BHP's value.
The Anglo-Australian company's Houston-based BHP Petroleumunit holds more than 838,000 acres spread across four U.S. shaleplays: Texas' Permian and Eagle Ford basins and the Haynesvilleand Fayetteville formations of Arkansas.
A divestiture of all of that land would be among the largestshale acreage sales to date.
BHP is offering to sell off acreage in seven differentpackages spanning three formations; it has generated interestfrom oil companies that paired with private equity firms to bidon all the assets, as well as from companies looking atindividual packages.
First bids were received last week, but no deal is expecteduntil very late in 2018 or early 2019, according to two of thepeople familiar with the matter who, like all the sources, couldnot speak for attribution as the negotiations are not public.
It was currently unclear whether BHP may hold a second bidround with certain bidders or all of them, or it may opt tocontinue weighing the received bids toward securing a preferreddeal.
The long delay can be explained by the sheer scale of theprocess and the number of parties involved, although bankershave also been critical of BHP's approach which has beenregarded as slow-moving throughout.
Bidders include consortiums of Royal Dutch Shell Plcand Blackstone Group LP, advised by Jefferies;and Chevron Corp partnered with Warburg Pincus, thepeople familiar with the matter said.
Apollo Global Management LLC is bidding solo, whileBP Plc Chief Executive Bob Dudley told Reuters last monththat it could place a bid.
A BHP spokeswoman declined to comment on the details of thesale.
However, Chief Executive Officer Andrew Mackenzie said at aconference in Florida last month that there was "encouraginginterest from potential bidders," and that the higher oil pricesand lower U.S. corporate tax rates than when the plan was firstannounced last summer were supporting the process.
BP, Shell, Chevron, Blackstone and Warburg Pincus declinedto comment. Apollo did not respond to a comment request.
FAYETTEVILLE
BHP values the entirety of the acreage at $14 billion, butanalysts have pegged the total value of the assets lower - at amaximum of $9 billion.
Bidding in consortiums would allow the integrated oilcompanies to focus on acreage that complemented their holdings,such as that in the Permian, while the private equity firmswould take on gas-rich acreage in the Haynesville formation.
The acreage includes holdings that BHP acquired in its $12billion takeover of Petrohawk Energy in 2011, as appetite forshale gas assets reached fever pitch. Shale gas assets have lostvalue as natural gas prices fell from about $4.50 in mid 2011 toa low of $1.60 in 2016. Prices have since recovered to about$2.93 per MMBtu.
Buyout houses are also dominant in the sale process for thegassy Fayetteville assets, the bid deadline for which was inlate April, having been marketed separately from the rest ofBHP's shale portfolio.
Barclays Plc and Bank of America-Merrill Lynchare running the sale process. Citigroup andGoldman Sachs had also helped BHP research the potentialspin-off of the unit into a new company, should divestment proveunachievable, Reuters previously reported.
(Reporting by Jessica Resnick-Ault and David French in NewYork, Additional reporting by Greg Roumeliotis in New York, RonBousso in London, Ernest Scheyder in Houston and John Tilak inTorontoEditing by Matthew Lewis)
