BHP To Acquire $4.75B In Chesapeake Energy Assets

BHP Billiton BHP, the world's largest mining company, will pay $4.75 billion to acquire Fayetteville shale properties from Oklahoma-based Chesapeake Energy CHK, the second-largest U.S. natural gas producer. The acquisition comes just days after BHP CEO Marius Kloppers told an Australian business news program that the oil and gas market could be one area his company would focus on when it comes to its next move regarding mergers and acquisitions. Still, the move seems to be in conflict with comments made by Kloppers last week during BHP's earings update when he said the company would spend $80 billion in organic growth, taking a pass on large-scale mergers and acquisitions over the near-term. Chesapeake, the second-largest producer in the Fayetteville shale, has been actively selling stakes in its natural gas projects due to slumping prices in an effort to raise cash to focus on more lucrative oil production projects. Last month, Chesapeake agreed to sell some shale assets in Wyoming and Colorado to Cnooc CEO, China's largest offshore oil exploration firm, for $570 million. That deal followed a $1 billion shale deal in south Texas between the two companies announced last October. Chesapeake also sold assets in the Barnett shale to France's Total TOT, Europe's third-largest oil company, in 2010. The deal with BHP includes existing net production of approximately 415 million cubic feet of natural gas equivalent per day and midstream assets with approximately 420 miles of pipeline, the companies said in a statement. The transaction is expected to close in the first half of this year.