Top global miner BHP Billiton will buy US gas producer Petrohawk Energy Corp for $12.1 billion, ramping up its bets on the booming but environmentally controversial shale gas industry.
The agreed all-cash deal is pitched at a rich 65% premium to Petrohawk's last-traded share price and follows BHP's $4.8 billion purchase of Chesapeake Energy's interest in an Arkansas shale gas field in February. The deal could more than double BHP's energy division's existing resource base, the company said.
Unlike iron ore and potash, the shale gas industry does not have a tight concentration of producers and BHP Chief Executive Marius Kloppers said he saw no significant regulatory barriers to the deal.
"This transaction will have extremely strong returns and development potential for a very, very long time," said J Michael Yeager, petroleum chief, BHP. "If the whole continent of Australia used electricity sourced from natural gas...this thing we purchased would supply that need for 18 years."
Petrohawk's shale assets cover about 1 million acres in Texas and Louisiana, with estimated 2011 net production of around 950 million cubic feet equivalent per day, or 158,000 barrels of oil equivalent per day.