A decision by BHP Billiton Ltd., the world’s biggest mining company, to give up a stake in a U.S. oil field in the Gulf of Mexico has puzzled analysts at Deutsche Bank AG who valued the holding at $450 million.

Stampede was “a good enough project for BHP” and “we were surprised to learn that BHP walked away” from its 20% stake, analysts led by Anna Mulholland and Paul Young wrote in a report. The analysts said they only realized the asset had been shed after BHP’s former partners—Chevron Corp., Statoil ASA, Nexen Inc. and the operator Hess Corp.— last week announced a $6 billion plan to develop it.

BHP’s withdrawal in April was disclosed on page 76 of the Melbourne-based company’s annual report on Sept. 25. “We decided not to proceed with the Stampede development project as we are focused on the higher-return opportunities within our portfolio,” BHP said in an e-mailed response to questions.

The world’s three-biggest mining companies BHP, Rio Tinto Group and Glencore Plc are cutting spending on new projects as commodities prices tumble and as pressure mounts from some shareholders to return cash.

The withdrawal from Stampede, combined with BHP’s announcement last month that it’s seeking to sell its Fayetteville shale-gas assets in Arkansas, “appears to be based on the drive to reduce group capex, with value now being sacrificed to maximize free cash flow,” Deutsche Bank said.

BHP’s Holding

Chevron, Statoil, Nexen and Hess each own 25% of the field after BHP’s holding was split among them. Stampede is projected to produce 80,000 bbl/d of oil from 2018 with recoverable resources of more than 300 MMboe.

BHP had held the stake since the discovery in 2005, which at the time was the deepest well drilled in the Gulf of Mexico at more than 10,363 m (34,000 ft).

Chevron, the second-largest U.S. oil and gas producer, last week described Stampede as a long-term development opportunity “that will deliver value to shareholders.”

“We also had the same opinion of the project,” Deutsche Bank said.

BHP spent $20 billion in 2011 on shale assets in the U.S., getting its foothold in U.S. plays in Arkansas, Louisiana and Texas. It operates two fields in the Gulf of Mexico—Shenzi and Neptune—and has interests in three others. Production from those fields was the equivalent of 36.1 MMbbl of oil in fiscal 2014.

Project Returns

The company estimates spending of $1.5 billion a year at its core projects in Australia and the Gulf of Mexico and sees returns of more than 50 percent on those “low-risk investments.” Returns at its Black Hawk shale wells are about 65%, BHP said Oct. 27.

Deutsche Bank said Stampede, formerly known as Knotty Head, would generate a return of 20 percent. BHP would have been required to invest $1.2 billion in the field to retain its stake.

BHP produced the equivalent of 246 MMbbl of oil in the year ended June 30, generating underlying earnings of $5.3 billion.

The stock advanced 2.2% to 1,663 pence (US$26.33) at 9:01 a.m. London time. It earlier rose 2.1% in Sydney trading.