BHP sews up Petrohawk acquisition

Marion Dakers
MINING giant BHP Billiton has sealed its $12.1bn (£7.35bn) of US shale gas specialist Petrohawk, just days before it is expected to report record-breaking profits.

BHP said yesterday it has approval from 97.4 per cent of Petrohawk shareholders, a month after agreeing the deal with the firm’s board.

The Anglo-Australian firm hopes to complete a short-form merger under the laws of Delaware, where Petrohawk is registered, “as promptly as practicable”.

BHP said it will delist Petrohawk from the New York stock exchange and run the group as an indirect wholly-owned subsidiary.

The deal, BHP’s largest since it merged with Billiton in 2001, gives the firm access to potentially lucrative shale gas basins in Texas and Louisiana.

At the end of 2010, Petrohawk had proven reserves of 3.4 trillion cubic feet, and was producing 825m cubic feet per day.

The International Energy Agency has said about 40 per cent of the increase in global gas production between now and 2035 will come from unconventional gas exploration, such as shale gas.

The deal has been sewn up following final regulatory approval from the US committee on foreign investment last Thursday.

BHP has renewed focus on expanding its energy business this year, having bought Chesapeake Energy for $4.75bn in February.

The group has finalised the takeover ahead of its second-half results this Wednesday, where analysts expect the firm to unveil attributable profit of $22.1bn (£13.4bn) for the year – putting BHP Billiton on course for the biggest ever full-year profit reported by a UK-listed company, beating Shell’s 2008 record.