BHP Billiton Petroleum will acquire Petrohawk Energy Corp., Houston, for $12.1 billion, giving the Australian firm operated positions in the US Eagle Ford and Haynesville shale resource plays and the Permian basin.
Under a definitive agreement announced late Thursday, BHP Billiton will make a cash tender offer by July 25 of $38.75 for Petrohawk shares. The Australian firm said that represents $12.1 billion in total equity value and $15.1 billion in total enterprise value, including assumption of debt.
Petrohawk's board unanimously urged its shareholders to accept. The company said BHP Billiton will retain Petrohawk's US work force.
Petrohawk has a nonproved resource base of 32 tcf equivalent for a total risked resource base of 35 tcfe. It had 3.4 tcfe of proved reserves at the end of 2010.
Petrohawk's assets span 1 million net acres in Texas and Louisiana. Estimated 2011 net production is 950 MMcfd of gas equivalent or 158,000 b/d of oil equivalent. The company reported $8.2 billion in assets at Mar. 31 and a $390 million profit before tax for the last calendar year.
BHP Billiton reported production in the 9 months ended Mar. 31, 2011, of 260,000 b/d of oil, condensate, and natural gas liquids and about 1 bcfd of natural gas. In the fiscal year ended June 30, 2009, it had 332 million bbl of liquids reserves and 2.3 tcf of gas reserves.
BHP Billiton Chief Executive Officer Marius Kloppers said the acquisition represents "a unique opportunity for Petrohawk shareholders and recognize the growth opportunities embedded in its portfolio immediately."
Combined with its recent acquisition of Chesapeake Energy Corp.'s Fayetteville shale assets in Arkansas, the Petrohawk deal provides the potential to more than double its existing resource base, BHP Billiton said.
With completion of the Petrohawk transaction, BHP Billiton "will be on track to deliver a compound annual production growth rate of more than 10% for the remainder of the decade as we accelerate our shale development program and leverage our strategic capability in the deep water," the acquiring company said.
Petrohawk Chief Executive Officer Floyd Wilson 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 realized value. We are excited to see this transaction completed and to be part of the BHP Billiton organization."
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