NEW YORK (TheStreet) -- Shares of BHP Billiton (BHP) - Get Report are diving by 7.93% to $19.96 on Friday morning, as the company announced a $7.2 billion write-down on its U.S. shale assets as a result of volatility and declining prices in the oil and gas industry.
The Australia-based global miner is engaged in the exploration, development, production, processing and marketing of various minerals and conventional and unconventional oil and gas.
The large asset impairment is the third from BHP, which moved into U.S. shale in 2011 when it spent $20.6 billion, including assumed debt, on two acquisitions when oil and gas prices were significantly higher than today, Reuters reported.
"Oil and gas markets have been significantly weaker than the industry expected," CEO Andrew Mackenzie said in a statement. "While we have made significant progress, the dramatic fall in prices has led to the disappointing writedown announced today."
BHP has reduced operating and capital costs dramatically by lowering its number of rigs from 26 to five, the company said.
The company is the most valuable miner by market capitalization, the FT noted.
The write-downs reduces the carrying value of the business to about $12 billion, not including deferred tax liabilities of roughly $4 billion, Reuters noted.