SYDNEY (Reuters) - Mining and oil company BHP Billiton unveiled a $12.1 billion agreed takeover of U.S. gas producer Petrohawk Energy Corp on Friday, marking the Anglo-Australian firm's biggest step into the booming shale-gas industry.
The all-cash deal is pitched at $38.75 per Petrohawk share, a 65 percent premium to its last-traded price, and follows BHP's $4.75 billion purchase of Chesapeake Energy's interest in an Arkansas shale gas field in February.
"This transaction would build on our recent acquisition of the Fayetteville shale in Arkansas and provides the potential to more than double our existing resource base," BHP's petroleum chief, J. Michael Yeager, said in a statement.
The acquisition gives BHP a risked resource base of 35 trillion cubic feet equivalent, the firm said, adding there was a break fee in the deal of $395 million.
Petrohawk shares last closed at $23.49, and portfolio manager Peter Chilton of Constellation Capital Management said he believed BHP felt secure about the premium being paid and was positioning itself for a U.S. economic rebound.
"Their view on their first shale buy was they were buying at bottom-of-the-cycle prices. I guess they see value here," he said. "With oil prices where they are, it's pretty hard to find opportunities that are not fully priced.
"If you have any confidence in an eventual U.S. economic recovery, that would be a positive. I don't think BHP wants to be seen to be buying something at the top of the market, so I think they should feel fairly safe buying this."
BHP shares fell 2 percent in early trade to A$42.76, underperforming a 0.4 percent fall in the broader market.
HUGE POTENTIAL VS ENVIRONMENTAL CONCERNS
Petrohawk's assets cover about 1 million net acres in Texas and Louisiana, with estimated 2011 net production of around 950 million cubic feet equivalent per day, or 158 thousand barrels of oil equivalent per day.
BHP is targeting shale gas as it emerges a major global source of cleaner-burning fuel in a world which is increasingly looking for alternatives to polluting coal-fired energy.
"If the whole continent of Australia used electricity sources from natural gas...this thing we purchased would supply that need for 18 years," said BHP petroleum boss J. Michael Yeager.
The International Energy Agency has said around 40 percent of the increase in global gas production between now and 2035 will come from unconventional gas exploration, such as fracking shale gas or coalbed methane gas, also known as coal seam gas.
A slide in a BHP presentation forecast shale gas would account for 50 percent of total U.S. gas market by 2030, also noting that compared to offshore oil and gas which can take five or more years to develop, shale gas can provide returns in months.
But shale gas is surrounded by environmental controversy.
Since March 2010, the U.S. Environmental Protection Agency and other federal agencies have been reviewing the environmental and health impact of shale gas drilling, which could mean new regulations on the sector.
In April, a blowout of a natural gas well in Pennsylvania spewed thousands of gallons of drilling fluid that contaminated local waterways and intensified debate over a shale drilling method called hydraulic fracturing or "fracking."
NEW BHP STRATEGY
BHP's recent record in chasing big deals has been poor. The company scrapped a hostile $39 billion offer for Canadian fertiliser maker Potash Corp last November after running into regulatory obstacles.
Early in his tenure at the helm of BHP, a diversified mining house known as the "Big Australian," CEO Marius Kloppers also launched an audacious but ultimately mistimed play for rival Rio Tinto just before the global credit crisis hit commodities markets in 2008.
After that, Kloppers attempted a $116 billion merger of BHP and rival Rio Tinto's vast iron ore businesses, infuriating steel mills which buy the ore and leading competition regulators on three continents to reject it.
(Reporting by Mark Bendeich in Sydney and Victoria Thieberger in Melbourne; Editing by Balazs Koranyi)
