Sydney - AFP
Anglo-Australian mining giant BHP Billiton Friday unveiled a $12.1-billion takeover of US firm Petrohawk Energy Corp. that will allow it to tap into the lucrative US shale gas market. BHP will pay $38.75 a share, but the total value of the acquisition will be $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 Marius Kloppers said. 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. But the Sydney- and London-listed resources giant\'s share price fell sharply on news of the acquisition, closing 1.63 percent lower at Aus$42.89 after hitting a two-week low in early trading. BHP said it would now be on track to deliver compound annual production growth of more than 10 percent for the rest of the 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 state of Arkansas, along with some pipeline assets, for about $4.75 billion in cash. Petrohawk\'s Eagle Ford and Haynesville shales and its Permian Basin resources cover 400,000 hectares (one million acres). The fields boasted proved reserves of 3.4 trillion cubic feet of natural gas equivalent in 2010 and were expected to produce about 950 million cubic feet (27 million cubic metres) of natural gas equivalent in 2011. The Houston-based firm expects to produce the equivalent of 158,000 barrels of oil a day in 2011, has around $8.2 billion in gross assets and posted a $390 million pre-tax profit for the year to December 2010. Oil and gas companies have been homing in on shale gas acquisitions as they bank on increasing demand spurred by the long-term prospects for the United States to cut its dependence on overseas natural resource imports. Analysts said that BHP\'s merger with Petrohawk would likely be a good one for it in the longer term, despite the premium it has agreed to pay. \"The biggest story is that natural gas is going to be a huge part of America\'s total energy demand and Petrohawk is well positioned to take advantage of that,\" said IG Markets institutional dealer Chris Weston. The Petrohawk board has unanimously recommended that the firm\'s shareholders accept the offer, the firms said. \"We believe these premium oil and natural gas assets would benefit significantly by residing within a larger entity that can employ more capital intensity to accelerate their realised value,\" said Petrohawk chief Floyd Wilson. \"We are excited to see this transaction completed and to be part of the BHP Billiton organisation,\" he said of the deal under which BHP will retain Petrohawk\'s staff. The acquisition is expected to close within the next three months and BHP\'s Kloppers said he did not see any major regulatory hurdles to the deal.