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Permalink Reply by PJ on July 17, 2011 at 9:40

Clearly the big fish have taken notice...great for those lucky share holders..  

 Hey read something today in yahoo news about a little CNG Louisiana Co. being bought out by a big, big one.. No names in what I read however. What news do you have on that?

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Permalink Reply by Ryan Scaggs on July 18, 2011 at 6:57

I think you all may be quite surprised with BHP Billiton if this deal does close.  Yes, BHP Billiton is a foreign owned company but Petroleum is run by mostly Americans with it's Corporate Headquarters in Houston.  BHP has been an unfamiliar company to most due to most of their activity being more globally based rather than locally.  They have two operated assets in the deepwater Gulf of Mexico and non-operated interest in several more.  One thing i can say about the company is they place a serious emphasis on safety; to include safety to people, the community and the environment.  They really do "mean what they say" regarding the safety aspect.  I know all of this because I have been employed by BHP Billiton for 4 years.  As I previously stated, I think you all will be quite surprised with BHP.

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Permalink Reply by Aubrey C. Sanders, Jr. on July 18, 2011 at 10:02

Ryan, I have followed BHP Billiton long time, especially their mining activities,  and I agree with your posting. I think enron is the antithesis of BHP.

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Permalink Reply by The_Baron on July 18, 2011 at 9:51

I think this will be bad for the Haynesville.

 

With gas prices low, I am sure BHP will want to focus on liquid rich plays while using the HBP acreage to pump up the "Proven reserves" on the books.

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Permalink Reply by Shale Wizard on July 19, 2011 at 4:06

Just as a sidebar, BHP bought all of CHK's interest in the Fayetteville Shale play in Arkansas a few months ago, apparently, the agreement was that CHK would continue to operate those wells.  BHP does not have a staff that has dealt with Natural Gas properties, dealing with land and royalty owners, this was one of the primary factors of the merger with PH because we have some of the best personnel resources in the industry here.  Yes, as with all mergers there will be some personnel changes, but for the land and royalty owners, you will be dealing with the same people you have always dealt with (with the exception of those that decide to take the money and run).  You will see ramped up staff at all offices with preliminary ideas of doubling the rig count currently in use.  Give it some time and everyone will see how good of a deal this will be for everyone involved, not just the stockholders.

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Permalink Reply by Aubrey C. Sanders, Jr. on July 19, 2011 at 5:10

Wizard, Perhaps the most important asset which BHP got was the knowledgable personnel. I certainly percieve that was the case in XOM acquisition of XTO. I have long time relationship with XTO and I have seen almost no personnel turnover  among those I deal with. It would appear to me that to this point XOM has pretty much allowed XTO personnel to continue to run XTO .

I do think we will see BHP, XOM, etal focus more on the liquid plays and I think that is most desirable.

 

Please keep all of us informed of how thinks are going to the extent that you can. Your contributions are appreciated very much.

 

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Permalink Reply by Ryan Scaggs on July 19, 2011 at 7:05

BHP did purchase Chesapeake's interest in the Fayetteville Shale a few months ago.  There were roughly 100 CHK employees in Searcy, AR which are all BHP employees since the deal finalized.  The agreement between CHK and BHP is that CHK will provide operation support for one year to aid in a smooth transition.  BHP did appoint their management team to the Fayetteville Shale.  You can visit BHP's website (www.bhpbilliton.com) to see all of the positions they are hiring within the Fayetteville Shale (these positions are signified by FPU in the title).  The Petrohawk deal is a bit different due to BHP acquiring the entire company but should not transition much different than the CHK deal.  It is BHP's expectation that all 650 Petrohawk employees will become BHP employees.  You will see some new faces at some point after the deal closes because BHP will want to "induce" their culture into the operation.  You are also correct about BHP doubling the rig count in the near future.  BHP will also spend a large sum of capital over the next ten years (I believe it is roughly 5 billion annually, of course this will be shared between the 3 plays acquired from Petrohawk).  The current PH employees should not be concerned about their employment because you are also correct about BHP needing PH's expertise.  I can tell you that BHP takes good care of their employees in many ways (I have been employed by BHP for approximately 4 years on one of their offshore assets).  Once again, I believe this will be a good deal for all involved.  I hope this info has been helpful and will help alleviate some of the uncertainty around this potential acquisition.  Keep in mind this deal will not close for another month or so.

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Permalink Reply by Aubrey C. Sanders, Jr. on July 19, 2011 at 7:43

Just thinking out loud. Could BHP be that company behind the mask behind Brown  Dense leasing?

Might be good fit.

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Permalink Reply by Bill Mendenhall on July 19, 2011 at 8:56

For those who haven't seen it, here is BHP's PowerPoint presentation on the Petrohawk deal:

 

http://www.bhpbilliton.com/home/investors/reports/Documents/110715_BHPBilliton_AllCashOfferForPetrohawk_Presentation.pdf

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Permalink Reply by Henry on July 21, 2011 at 2:33

Thanks for the link to the presentation.  I found it interesting how the 8 Bcf contour in the map on Slide 12 has grown outward over the last year.  If you compare it to the famous Petrohawk map put out about a year ago, you will find it has grown outward in almost every direction.  Not tremendous outward growth, but the 8 Bcf contour in this new map covers more area than the one in the older map.

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Permalink Reply by Skip Peel - Mineral Consultant on July 21, 2011 at 2:47

IMO, some major portion of that expansion is due to operators making better wells.  All are on an accelerated learning curve trying numerous variations to their drilling and completion designs.  I think many areas of the Play that do not have clay content challenges will continue to see incremental improvements in production.  The operators will also continue to reduce their cost to produce an mcf.

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Permalink Reply by The_Baron on July 21, 2011 at 2:58

I think the maps area expanded because HK was trying to increase its "unproven reserves"

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