Oil & Gas Pro

BHP BILLITON TO ACQUIRE PETROHAWK

BHP Billiton Ltd. (BHP), the world’s largest mining company, agreed to acquire Petrohawk Energy Corp. for $12.1 billion in cash to extend its shale oil production in the U.S.

Melbourne-based BHP will pay Petrohawk $38.75 a share, the two companies said today in a statement. That’s 65 percent more than the Houston-based company’s closing price on July 14.

The acquisition gives BHP three assets across about one million net acres in Texas and Louisiana. BHP agreed to pay $4.75 billion in cash in February for Chesapeake Energy Corp.’s Arkansas shale gas assets to tap growth in the U.S. gas market, the world’s biggest.

“Petrohawk has a focused portfolio of three world class onshore natural gas and liquids rich shale assets,” BHP Petroleum Chief Executive J. Michael Yeager said in the statement.

Petrohawk fell 1.8 percent to close yesterday at $23.49 at in New York. BHP fell 0.1 percent to A$43.60 at the 4:10 p.m. close of Sydney trading yesterday.

The purchase would be the largest acquisition of a U.S. exploration and production company since Exxon Mobil Corp. bought XTO Energy Inc. for $34.9 billion in 2009, according to Bloomberg data.

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Permalink Reply by Kat Bloomfield on July 21, 2011 at 13:48
In the US, E&P companies have no powers of eminent domain to extract minerals from private or public land. Nor does the government. As Skip aptly noted, forced pooling under Louisiana law (which is NOT a "taking") ensures that all involved reap their respective fair shares.

landownerPermalink Reply by JHH on July 22, 2011 at 6:57
But utility companies have eminent domain rights don't they... pipeline companies?  i could be wrong.  i think i remember hearing  a pipeline company using eminent domain authority to get a pipeline built.  this after making a "reasonable" offer and not being able to go another route for the pipeline.

landownerPermalink Reply by Spring Branch,mineral owner on July 22, 2011 at 7:58
I was thinking that only "interstate" pipelines rather than "intrastate" pipelines had the power of imminent domain.

landownerPermalink Reply by Joe Aldridge on July 22, 2011 at 8:12

SB,

Any Common Carrier or Public Authority  has Imminent Domain. That includes utilities, interstate and intrastate pipelines, etc. In-field pipelines do not. That is my understanding.

Permalink Reply by Aubrey C. Sanders, Jr. on July 22, 2011 at 8:59
Joe, Your understanding is correct unless something has changed in last year or two. I have had an experience with location of gathering line on my property. As far as federal law goes the ICC has jurisdiction on interstate pipelines.
Permalink Reply by Kat Bloomfield on July 22, 2011 at 9:38

a pipeline is a different animal from acts of extraction of minerals.  My response addressed there NOT being powers of eminent domain to extract  minerals.  What has since been stated in response regarding pipelines is accurate. 

Pipelines (and other common carriers, such as electric transmission companies, etc.) have, by statute, powers of eminent domain, which without a statute, lie only with the government. 

ICC regulates interstate pipelines, even having powers to approve or disapprove.   Once approved, the interstate pipeline may then exercise its statutory powers of ED.

Gathering lines are not pipelines and, thus, eminent domain is not available to "force" their location.  That's usually addressed in the mineral leases or by separate contract.

And, just as an aside, while the exercise of the power of eminent domain may be imminent (i.e. immediately pending), the power is one of eminent, not imminent, domain.

Permalink Reply by Aubrey C. Sanders, Jr. on July 22, 2011 at 9:55

Kat, I cannot resist the temptation to say this to an attorney: "It all depends on your definition of what IS IS." Isn't the English language great. Especially so in regard legal parlance.

 

Now it is almost party time. If later than Aug 24 I will be there.


landownerPermalink Reply by smith1 on July 22, 2011 at 2:02
Does this include KinderHawk, etc.?

landownerPermalink Reply by Bill Mendenhall on July 22, 2011 at 6:30
Since all of Petrohawk's stock is being acquired for cash, all assets owned by Petrohawk will, in effect, become the property of BHP. So if Petrohawk owns any of Kinderhawk, that asset will go to BHP in the sale.

landownerPermalink Reply by ken hatcher on July 22, 2011 at 8:16
When the Hawk started to run lean earlier they were actively leasing T-8 /13-W southern portion In Sabine Parish. Hoping they return before previous leases expire.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on July 26, 2011 at 3:21
BHP gets US shale gas takeover approval
July 26, 2011 - 10:06AM

BHP Billiton has received approval from the US competition regulator for its $US15.1 billion ($14 billion) takeover of shale gas company Petrohawk Energy.

The approval came as the world's biggest miner formally launched the bid with the US Securities and Exchange Commission.

The regulator, the US Federal Trade Commission, had granted early approval for the $US38.75 per Petrohawk share offer, a 49.5 per cent premium.
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The friendly takeover would be BHP's second major deal in America's booming shale gas sector in the last six months, as technology makes it easier to produce gas from a non-conventional and previously difficult source of fuel.

The advances have made it economically viable, and it produces substantially less carbon emissions than oil.

The global miner in February made a $US4.75 billion purchase of Chesapeake Energy Corp's interest in the Fayetteville shale field in Arkansas.

Analysts from investment bank UBS say shale is projected to comprise 50 per cent of US gas supply by 2030.

Read more: http://www.smh.com.au/business/bhp-gets-us-shale-gas-takeover-appro...

landownerPermalink Reply by True Texan on July 26, 2011 at 18:35
I hope this means that Petrohawk will not drill our lease within the next two months.  I would like to see an American company make this purchase.  Maybe this sell will not go through once the governments have to look at it.

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