Anglo-Australian mining giant BHP Billiton yesterday unveiled a US$12.1 billion takeover of US company Petrohawk Energy Corp that will allow it to tap into the lucrative American shale gas market.
BHP will pay US$38.75 a share, but the total value of the acquisition will be US$15.1 billion including Petrohawk’s debt, in a deal that will give BHP access to huge shale assets in Texas and Louisiana, the two companies said.
“The proposed acquisition of Petrohawk is consistent with our ... strategy and provides us with even greater exposure to the world’s largest energy market, while also broadening our geographic and customer spread,” BHP chief executive officer Marius Kloppers said.
Photo: Reuters
The agreed sale price represents a 65 percent premium on Petrohawk’s closing share price on Thursday, offering an indication of BHP’s keenness to be a major player in the fast-growing US natural gas market.
However, the Sydney and London--listed resources giant’s share price fell sharply on news of the acquisition, closing 1.63 percent lower at A$42.89 (US$45.67) after hitting a two-week low in early trading.
BHP said that it would now be on track to deliver compound -annual production growth of more than 10 percent for the rest of this decade as it develops its shale gas and deepwater resources.
The move marks a major new step in the bid by BHP, one of the world’s biggest miners, to diversify from minerals and mining into oil and gas.
It follows BHP’s purchase earlier this year of US-based Chesapeake Energy Corp’s shale gas holdings in the US state of Arkansas, along with some pipeline assets, for about US$4.75 billion in cash.
Petrohawk’s Eagle Ford and Haynesville shales and its Permian Basin resources cover 400,000 hectares. Those fields boasted proved reserves of 96 billion cubic meters of natural gas equivalent last year.
They were expected to produce about 27 million cubic meters of natural gas equivalent this year.
The Houston-based firm expects to produce the equivalent of 158,000 barrels of oil a day this year, has around US$8.2 billion in gross assets and posted a US$390 million pre-tax profit for the year to December last year.
The Petrohawk board has unanimously recommended that the firm’s shareholders accept the offer, the firms said.
The acquisition is expected to close within the next three months and the mining giant’s Kloppers said that he did not foresee any major regulatory hurdles to the deal.
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