Shale Daily / NGI All News Access

BHP Billiton-Petrohawk Merger Clears Final Regulatory Hurdle

The Committee on Foreign Investment in the United States has given Australia's BHP Billiton Ltd. and shale patch pioneer Petrohawk Energy Corp. the final necessary regulatory green light for their proposed $12.1 billion merger, concluding that the deal poses no national security issues of concern, the companies said.

The U.S. Federal Trade Commission last month informed the companies of the early termination of the tender offer's waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the proposed merger was previously approved by the Petrohawk board of directors.

The tender offer has been filed with the Securities and Exchange Commission and was scheduled to close at midnight Friday (Aug. 19), the companies said Thursday.

BHP Billiton made its $38.75/share offer -- giving the deal an enterprise value of $15.1 billion including debt assumption -- last month (see Shale Daily, July 18). The merger would more than double BHP Billiton's resource base and grow proved reserves by about 30%.

Combined with a separate deal earlier this year in which it paid $4.75 billion to Chesapeake Energy Corp. for nearly half a billion acres in the Fayetteville Shale, (see Shale Daily, Feb. 23), BHP Billiton this year has spent nearly $17 billion on U.S. shales. By its own estimate, BHP Billiton Petroleum would rank at No. 7 among independents, up from No. 21, thanks to Petrohawk.

The Petrohawk deal would give BHP Billiton operated positions in three "world class" resource plays: the Eagle Ford Shale in South Texas, the Haynesville shales in North Louisiana and East Texas and the Permian Basin in West Texas.

Petrohawk's 2Q2011 production grew 15% compared with 2Q2010, the company said earlier this month (see Daily GPI, Aug. 5). Petrohawk reported 2Q2011 net production averaging 684 MMcfe/d in the Haynesville Shale. In the Eagle Ford's Black Hawk area the company reported net production averaging 73 MMcfe/d. In the Hawkville Field section of the play Petrohawk had net production averaging 129 MMcfe/d.

The acquisition of Petrohawk by BHP Billiton would also benefit Kinder Morgan Energy Partners LP (KMP), which bought the half of Haynesville joint venture (JV) KinderHawk Field Services LLC that it didn't already own from Petrohawk earlier this year (see Shale Daily, May 6). KMP and Petrohawk also have a gathering JV called EagleHawk Field Services LLC in the Hawkville and Black Hawk fields.

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