BHP Makes Another Big Bet on US Shales

BHP Billiton is acquiring shale specialist Petrohawk Energy Corporation in an all-cash tender offer valued at approximately US$12.1 billion and a total enterprise value of approximately US$15.1 billion, including the assumption of net debt.

BHP made its first big splash in the unconventional hydrocarbons with a deal to buy Chesapeake Energy’s Arkansas-based gas business for $4.75bn this past February.

The transaction would provide BHP Billiton with positions in the three world class resource plays: the Eagle Ford and Haynesville shales in Texas and Louisiana and the oil-rich shale Permian Basin in Texas.

Petrohawk’s assets cover approximately 1,000,000 net acres in Texas and Louisiana, with estimated 2011 net production of approximately 950 million cubic feet equivalent per day (MMcfe/d), or 158 thousand barrels of oil equivalent per day (Mboe/d).

BHP Billiton Petroleum Chief Executive, J. Michael Yeager, said the Petrohawk acquisition would add high quality growth to the company. “Petrohawk has a focused portfolio of three world class onshore natural gas and liquids rich shale assets. With over a decade of significant investment and volume growth ahead, this transaction would build on our recent acquisition of the Fayetteville shale in Arkansas and provides the potential to more than double our existing resource base.

Source: BHP Billiton