It is the second writedown on its US oil and gas assets in six months.

The company will also reduce the number of operated rigs in the onshore US business from seven to five in the March 2016 quarter, and said it is reviewing investment and development plans for the remainder of the 2016 financial year.

Investors, however, seemed to welcome the decision, pushing up its beaten-down shares more than 5 per cent to $15.70 each, in early trade on Friday.

“Oil and gas markets have been significantly weaker than the industry expected. We responded quickly by dramatically cutting our operating and capital costs, and reducing the number of operated rigs in the onshore US business,” chief executive 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.”

Oil prices fell to a 12-year low of $US30 a barrel this week, compared to the $100 level it traded at in mid 2014, hit by weakening global demand and a supply glut.

BHP said it has also reduced its medium and long-term gas price assumptions. However, its long-term price assumptions continue to reflect the market’s attractive supply and demand fundamentals.

The mining giant has been under pressure over a deadly dam disaster in Brazil in November, which could result in hefty fines and payment of damages for the company.

Ahead of today’s announcement, BHP shares had slipped below $15 each to trade at 11-year lows.

Their resilience on Friday came despite a one per cent fall in the overnight price of iron ore, down to $US38.40 a tonne.

AAP