AUSTRALIAN MINING GIANT BHP IS SHUTTING DOWN 40% OF ITS US SHALE RIGS

A general view of Tesoro's Los Angeles refinery in Los Angeles, California October 10, 2014.

The hits keep coming for shale gas producers.

In an announcement on Tuesday night (well, Wednesday morning in Australia), Australian mining giant BHP said it would shut down 40% of its US shale oil rigs over by the end of its fiscal year.

BHP CEO Andrew Mackenzie said:

"In Petroleum, we have moved quickly in response to lower prices and will reduce the number of rigs we operate in our Onshore US business by approximately 40 per cent by the end of this financial year. The revised drilling program will benefit from significant improvements in drilling and completions efficiency. Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage. However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production."

This announcement from BHP follows news from US oil services giant Baker Hughes that it would fire 7,000 employees. Baker Hughes also said it expects the number of oil rigs in use in the US will fall significantly before the end of the current downturn. 

Halliburton, which agreed to merge with Baker Hughes last November, also said that it expects cutbacks to be "in line" with competitors by the end of the quarter, according to Bloomberg. 

And these reductions all follow news from Schlumberger last Thursday that the company would cut 9,000 jobs in response to the decline in oil prices. 

Tough times.

Bloomberg