BHP CEO Andrew Mackenzie told bankers and investors at a conference in Spain earlier this month that shale was not something his company wanted to be a part of going forward any longer.
"If there is a natural owner out there that believes there is more upside that can be achieved within the shale business than we do, we will be more than happy to talk turkey with them," he said.
Analysts have perceived those comments as being aimed at placating US hedge fund Elliott Management which wants BHP to spin off its US oil and gas assets and boost returns to shareholders.
Elliott, which has a 4.1% stake in BHP's London-listed arm, ramped up its campaign a fortnight ago in a letter sent to the diversified miner's management just hours before Mackenzie was due to speak at the Spanish conference.
Mackenzie's comments also hinted at potential difficulties in finding a buyer that could offer a decent price for its shale assets, but FNZC sees that as unlikely.
"Surely any potential suitor would understand their capabilities coming in and adjust pricing expectations accordingly to account for acquiring higher-risk acreage versus their own portfolio," the firm said in response to Mackenzie's apparent concerns.
"This should only become an issue if it is such an impediment that no interested parties are attracted [we think unlikely]; or the risk-adjusted bid price from any buyer sees no reasonable offer floated versus BHP expectations."
FNZC pondered at what price BHP would selling up - the $US14.7 billion carried (including goodwill) or $6.5 billion (Elliott's collated consensus figures).
Another consideration was how any potential buyer would treat the $4 billion deferred tax liability tied to the acreage as well, though FNZC conceded its own grasp of that tax consideration was "poor at best".
While it may be widely acknowledged that BHP's foray into US onshore was "poorly timed" at "too high a price", last Friday FNZC highlighted the "somewhat conflicting messaging" being delivered as BHP squabbles with the vociferous Elliott.
"Internal asset reviews must be part of normal business (we'd hope), but with focus unquestionably on BHP somehow monetising a large part, if not all, of US onshore from the people we speak to, we think the upside outweighs the inevitable commentary that will come from selling acreage when oil is [about] $US50/bbl," FNZC said.
With only about $US54 million of spent at in the Fayetteville shale between July 1 and December 31 2016), the firm said it was arguably clear well before the March quarterly that an exit was on the cards.
The same could be said for the Hayesville Shale, with about $57 million spent over the same period, and with free cash flow on that asset negative, and the Fayetteville gas play only cashflow positive in the December half of 2016, FNZC said that, absent an oil price rally, the rationale to exit appeared "sound".
Yet BHP flagged in its March quarterly that its rig count would grow from four to 10, implying incremental capital of about $900 million to about $1.5 billion in 2017-18.
Given OPEC's decision late last week to extend its production cuts, FNZC said "it's hard to see a big rig increase driven by optimism in commodity prices", as forward curves are still incredibly flat.
"Yes, cost-outs, optimisation drive the economics argument we're sure, but BHP is not alone doing this in the US," FNZC said.
"Our trip there in late 2016 gave us good reason to believe that the whole industry is ramping up and rig counts tell us this.
"Do BHP see the rate of drilling improvement and cost-outs to be greater than their peers, or are the six incremental rigs purely a reflection of them keeping up with their peers?"
While BHP has the capacity to ramp up further too, FNZC questioned the opportunity cost where that incremental dollar could be going to a different division that may generate far higher returns.
BHP also announced this month it was dropping the world "Billiton" from its name.
