BHP Billiton is staring down the barrel of a $10.3 billion write-down on its US shale oil and gas assets.

A deep plunge in energy prices over the past year-and-a-half has led the firm to book an impairment charge of approximately $US7.2 billion ($AU10.3 billion) in its next half-yearly accounts, due in February.

The big hit reflects the ever-diminishing value of oil, which is down more than 70 per cent from $US115 a barrel in mid-2014 to lows around $US30 a barrel for Brent crude in recent weeks.

In a statement to the ASX, BHP Billiton said its future oil price expectations had been lowered. While it has also altered development plans to reduce the value of its onshore fossil fuel assets to $US16 billion.

BHP Billiton pointed to weakness in US gas prices as a key factor.

Despite slashing its medium and long-term gas price assumptions, BHP says it still believes oil prices will recover.

“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 from 26 a year ago to five by the end of the current quarter,” said BHP Billiton's chief executive Andrew Mackenzie.

“While we have made significant progress, the dramatic fall in prices has led to the disappointing write-down announced today.”

The move comes just a few months after BHP was forced to cut the value of its US oil and gas assets by $US2 billion in full-year results in August.

BHP Billiton said at the time that it needed a West Texas crude price close to $US60 a barrel to make the onshore business cashflow positive, but the West Texas price is currently just $US31.17.

Morningstar senior resources analyst Matthew Hodge says BHP Billiton is not alone.

“Write-downs are likely and that's just a reflection of - they bought things, built things at the wrong price at the wrong time, paid too much for it and now those assets aren't worth as much as that,” he told the ABC.

“It's already being reflected in the share prices of these companies. You know, the market's telling you; ‘We don't think the assets are worth what they were paid for’.”

The write-down and associated cost-cutting led to a small surge in BHP Billiton’s share price.