Seismic reflections: Yet another US shale mega-deal

BHP’s agreed acquisition of Petrohawk constitutes another very interesting deal in the US shale arena. The deal involves BHP paying $12.1bn in cash for Petrohawk, which is one of a string of mid-tier US oil and gas stocks that have risen to prominence in recent years to develop the shale plays of the US Mid-Continent and southern states. BHP will also be assuming $3.0bn in net debt resulting in an enterprise value of $15.1bn. Petrohawk has a very sizeable resource base of 35tcf (5.8bnboe) spread across three plays: Eagle Ford (South Texas), Permian (West Texas) and Haynesville (Louisiana). These are all excellent addresses. The proven reserves are 3.4tcf (567mmboe). Production is currently highly significant at 950mmcfe/d or 158,000boe/d.

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