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 VSC DeSoto South on July 15, 2011 at 3:12
It will be interesting to see if the deal  stipulates the purchase of HK but HK remains a separate organization and entity or if it become part of BHP. Especially for stock holders who bought HK at the high in 2008 ($45+) and then held it until now at $24 , at a a loss. Should they buy more, hold or sell? The analysts say, Hold, such a dilemma.
Permalink Reply by Shale Wizard on July 15, 2011 at 4:37
It is a cash offer for the stock at close at $38.75.  HK stock will cease to exist.  Petrohawk will remain a subsidiary of BHP for the time being.  All employees are being retained as retention bonuses are being offered next week.  As an employee at PH, we have mixed emotions, especially those that were originally with Medallion and even KCS.  I thnk overall for the next 18 months there will little if any changes that will be noticed. 
Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2011 at 4:43
Best of Luck to all the Petrohawk employees.  The Play could use a little stimulus.  And HK operating expertise fully funded would be a most welcome development.
Permalink Reply by Shale Wizard on July 15, 2011 at 16:55
Thanks Skip, after several meetings and conferences today, PH employees have been assured that they will keep their jobs.  BHP is counting on the experience PH employees and the capital of BHP to make a very lucrative business venture.  As of now it will be business as usual, little if any changes will be noted for awhile. 
Permalink Reply by The_Baron on July 15, 2011 at 3:47

Heard about this Wed., thought it was gossip though....

 

Not much suprise here. They have been activly saying that they wanted to be bought out for some time. I think their strategy in the HA was to simply book as much "proven reserves" as possible.

Permalink Reply by William C. Morrison on July 15, 2011 at 4:19
Broken Hill Properties (BHP) - Billington bought up copper mines in Arizona then shut them all down.  I suppose with the price of copper today, they are busily opening them up again, or at least have made enough money on copper to buy something else.  They tend to over pay and I guess this is the case again, over paying for Hawk.  None-the-less it is an indicator that the gas play is here to stay for a while.  Now,if the price of gas would increase then, the Tuscaloosa Trend would heat up again.  Til then, well, we wait.  No pun intended.
Permalink Reply by DrWAVeSport Cd1 on July 15, 2011 at 4:22

GHS,

Look at the Nat Gas Stocks this a.m.  UP and UP.    This M&A makes BIG BUCKS for Floyd Wilson and his top brass.  These deals are done when THEY get a deal on a Golden Ticket.  When Arkla/NorAm Energy  (now Houston Industries/CenterPoint/GenOn) found Houston Industries, the Arkla Execs made a fortune in cash and stock options, and they dropped a ticking financial bomb square in the lap of HOU (Arkla was debt ridden up to its neck.)  And someone always has to pay the M&A costs...That's the Insider Trade/Deal.  That's Done.

 

But let's look out on a longer time frame.   The Shale oil and gas is going to be the U.S.A.'s Golden Ticket to a rebirth of an American Industry that died when OPEC DECIDED it would die and when we wanted "cheap" fuel. 

This M&A, IMO, just like the XOM Merger, is about a New Energy Industry.  Cheaper Oil and  Nat Gas at the Pump...if they can sell it to the American Consumer...That is...BUY AMERICAN Shale Oil and Gas...At the Pump.  And what XOM or Chevron or RDShell Company can't do that?  The timing is right and the supply is now abundant.  And it means AMERICAN JOBS!  Where else are we going to find the New Jobs this country is desperate for NOW?????  

Those, IMHO, Fools we call "Government"...and I'm talking both sides of the Aisle...would take away their own Mother's last meal and job and house and SS check, if it meant they could use it for their own POLITICAL PORK PIE!   They all look like SPOILED ROTTEN CHILDREN WHO WHEN THEY THROW THEIR TANTRUMS AND REFUSE TO GROW UP... THEY WILL GET THEIR WAY!!!!!    COME ON!   (I digress....I apologize...)  

I Summarize, THEY GET IT TOGETHER, GET A VOTE, GET IT DONE, AND FOCUS ON Getting Americans Back To Work....I see THEY ALL HAVE JOBS!!!!!   Open Your Eyes Congress.   A REBIRTH OF THE AMERICAN ENERGY INDUSTRY IS A WIN WIN FOR BOTH SIDES, e.g. JOBS,  JOBS, JOBS TRANSLATES TO:  PAYING DOWN DEBT.  Haven't THEY been RANTING ABOUT NO JOBS GROWTH?  AREN'T THEY RANTING ABOUT THE DEBT CEILING???  We have to find some kind of INDUSTRY that will Kick-Start this Economy and Grow Jobs or it won't matter a/The "HILL" of beans what the U.S. Debt Ceiling goes to.  And then CONGRESS WILL BE WITHOUT THEIR "CUSHY" JOBS!  (I digress again...I'm #$%^#** Mad.)

 

Floyd Wilson, IMO, had hoped to be in the XTO position, but I'm sure $12B looks pretty good too.  Looking out, only the Big Boys have the means and money to lead a Revolution in the U. S. Energy Industry.  Consolidation is key.  And, if the HKs and the XTOs, etc. get deals, then that's the direction these Shale Plays will run.  All Shale Players are looking for a Buy-out if the CEO "Price Is Right."   (Opine Only)

 

Good Luck to HK Stakeholders and Congratulations to Floyd!   Now, going for that cup of coffee I need (LOL).

 

DrWAVeSport Cd1  July 15, 2011

 

Permalink Reply by Lerret on July 15, 2011 at 5:44

Reminded of an old saying from Arkansas

 

"What you come here with is ours...what you leave here with you can keep..."

 

Glad I don't own any BHP

Permalink Reply by BeverlyRevelry on July 15, 2011 at 16:34
Can you spell E-N-R-O-N ?
Permalink Reply by BeverlyRevelry on July 15, 2011 at 16:35
Can you spell E-N-R-O-N ?
Permalink Reply by JHH on July 16, 2011 at 0:19
I have thoughts of Enron with another company... but not BHP.  Please elaborate.
Permalink Reply by Skip Peel - Mineral Consultant on July 16, 2011 at 2:10

From shreveporttimes.com  Added emphasis is mine.  The Sky Is Not Falling!

BHP Billiton Ltd. petroleum CEO Mike Yeager and Petrohawk Energy CEO Floyd Wilson flew to Shreveport on Friday morning to tell Petrohawk employees in person about a proposed company merger.

"That's kind of an indication of their importance in the potential deal," Joan Dunlap, vice president of investor relations, said of the local employees.

Melbourne-based BHP announced Friday it would buy Petrohawk for $12.1 billion in cash, giving the world's largest miner greater access to U.S. shale gas assets. BHP will pay $38.75 for each Petrohawk share in an all-cash tender offer. The total value of the deal is $15.1 billion, including Petrohawk's debt.

The deal comes just months after BHP, which bills itself as the third largest company in the world, bought a $4.75 billion stake in a shale gas field in Arkansas, which marked the first move by the company into the rapidly growing U.S. shale gas business.

The buyout, which should be completed within three months after regulatory hurdles are surpassed, has potential to increase spending in the Haynesville Shale region.

"We were attracted to their track record on environment and safety. If the deal is finalized, the community can benefit from having Petrohawk's staff stay in place, but with significant resources behind them," Dunlap said. Petrohawk has 175 direct employees, excluding contract employees and companies.

The proposed deal comes at a time when activity has slowed somewhat in the shale play. The latest rig count shows 105 working in the Haynesville Shale parishes, which is down 30 percent from the peak. Stagnant natural gas prices have companies sharing focus with oil-rich plays elsewhere in the nation, especially in the Eagle Ford in south Texas. The Tuscaloosa Marine shale that spreads across 2.7 acres in central Louisiana and southwest Mississippi also is being eyed for its potential as the next big oil play.


Construction of Petrohawk's Shreveport office is in its early stages but is expected to continue with the new owners, Dunlap said.

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