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BIL
BIBLT
BIL - BHP Billiton Plc - BHP Billiton and Petrohawk Energy Corporation
announce merger agreement
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 15 July 2011
Number 20/11
BHP BILLITON AND PETROHAWK ENERGY CORPORATION ANNOUNCE MERGER AGREEMENT
BHP Billiton (ASX: BHP, NYSE: BHP, LSE: BLT, JSE: BIL) and Petrohawk Energy
Corporation ("Petrohawk") (NYSE: HK) announced today that the companies have
entered into a definitive agreement for BHP Billiton to acquire Petrohawk
for US$38.75 per share by means of an all-cash tender offer for all of the
issued and outstanding shares of Petrohawk, representing a total equity
value of approximately US$12.1 billion and a total enterprise value of
approximately US$15.1 billion, including the assumption of net debt. The
Petrohawk board of directors has unanimously recommended to Petrohawk
shareholders that they accept the offer.
The transaction would provide BHP Billiton with operated positions in the
three world class resource plays of the Eagle Ford and Haynesville shales,
and the Permian Basin. Petrohawk`s assets cover approximately 1,000,000 net
acres in Texas and Louisiana, with estimated 2011 net production of
approximately 950 million cubic feet equivalent per day (MMcfe/d), or 158
thousand barrels of oil equivalent per day (Mboe/d). At year-end 2010,
Petrohawk reported proved reserves of 3.4 trillion cubic feet of natural gas
equivalent (Tcfe). The company has a current non-proved resources base of
32 Tcfe for a total risked resource base of 35 Tcfe. Petrohawk reported
gross assets of US$8.2 billion as at 31 March 2011 and US$390 million of
profit before tax for the year ended 31 December 2010.
BHP Billiton CEO, Marius Kloppers, said the acquisition was a natural fit
with BHP Billiton`s strategy.
"The proposed acquisition of Petrohawk is consistent with our well defined,
upstream, Tier 1 strategy and provides us with even greater exposure to the
world`s largest energy market, while also broadening our geographic and
customer spread. Importantly, our offer and the associated substantial
premium represent a unique opportunity for Petrohawk shareholders and
recognise the growth opportunities embedded in its portfolio immediately."
BHP Billiton Petroleum Chief Executive, J. Michael Yeager, said the
Petrohawk acquisition would add high quality growth to the company.
"Petrohawk has a focused portfolio of three world class onshore natural gas
and liquids rich shale assets. With over a decade of significant investment
and volume growth ahead, 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. Following completion of the
Petrohawk transaction, BHP Billiton Petroleum will be on track to deliver a
compound annual production growth rate of more than 10 per cent for the
remainder of the decade as we accelerate our shale development program and
leverage our strategic capability in the deep water.
"Importantly, BHP Billiton would retain Petrohawk`s sizeable U.S. based
workforce, which has been at the forefront of the technological innovation
that brought about the economic viability of U.S. shales. We look forward to
extending our dedication to safeguarding the environment and the communities
where we operate and continuing our commitment to safe and responsible
operating practices across all of our shale gas plays, including the world-
class assets that Petrohawk would bring to our portfolio."
Petrohawk CEO, Floyd Wilson, stated: "We believe these premium oil and
natural gas assets would benefit significantly by residing within a larger
entity that can employ more capital intensity to accelerate their realised
value. We are excited to see this transaction completed and to be part of
the BHP Billiton organisation."
The tender offer is expected to commence by 25 July 2011. The acquisition
is subject to the terms and conditions set forth in the merger agreement,
including a condition that at least a majority of the outstanding Petrohawk
shares are tendered, that the waiting period under the U.S. Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, has expired or been
terminated and that clearance is obtained from the Committee on Foreign
Investment in the United States, and other customary conditions. If the
tender offer is completed, un-tendered shares of Petrohawk will be converted
into the right to receive the same US$38.75 per share price paid in the
tender offer. The transaction is to be financed from existing cash
resources and a new credit facility and is not subject to any financing
contingency. The transaction is expected to close in the third quarter of
2011.
BHP Billiton has engaged Barclays Capital and Scotia Waterous as financial
advisors in connection with this Offer. Its legal advisors are Sullivan &
Cromwell LLP and Morgan, Lewis & Bockius LLP in the United States. Barclays
Capital will act as Dealer Manager for the offer. Petrohawk has engaged
Goldman Sachs as its financial advisor in connection to this Offer. Its
legal advisor is Simpson Thacher & Bartlett LLP.
Additional Information
The tender offer described in this communication (the "Offer") has not yet
commenced, and this communication is neither an offer to purchase nor a
solicitation of an offer to sell any shares of the common stock of Petrohawk
Energy Corporation ("Petrohawk") or any other securities. On the
commencement date of the Offer, a tender offer statement on Schedule TO,
including an offer to purchase, a letter of transmittal and related
documents, will be filed with the United States Securities and Exchange
Commission (the "SEC"). The offer to purchase shares of Petrohawk common
stock will only be made pursuant to the offer to purchase, the letter of
transmittal and related documents filed with such Schedule TO. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE OFFER, AS THEY MAY BE
AMENDED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. The merger agreement and the tender offer
statement will be filed with the SEC by North America Holdings II Inc., BHP
Billiton Petroleum (North America) Inc. and BHP Billiton Limited, and the
solicitation/recommendation statement will be filed with the SEC by
Petrohawk. Investors and security holders may obtain a free copy of these
statements (when available) and other documents filed with the SEC at the
website maintained by the SEC at www.sec.gov or by directing such requests
to MacKenzie Partners, Inc. at 212-929-5500 or toll-free at 800-322-2885.
The merger agreement will also be published on BHP Billiton Limited`s
company announcement page on the ASX website and a copy will be available
for inspection through the National Storage Mechanism in the UK at
www.hemscott.com/nsm.do.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain, in addition to historical information,
certain forward-looking statements regarding future events, conditions,
circumstances or the future financial performance of BHP Billiton Plc and
BHP Billiton Limited and their affiliates, including North America Holdings
II Inc. and BHP Billiton Petroleum (North America) Inc. (collectively, the
"BHP Billiton Group"), Petrohawk or the enlarged BHP Billiton Group
following completion of the Offer, the merger and other related transactions
(the "Transactions"). Often, but not always, forward-looking statements can
be identified by the use of words such as "plans," "expects," "expected,"
"scheduled," "estimates," "intends," "anticipates" or "believes," or
variations of such words and phrases or state that certain actions, events,
conditions, circumstances or results "may," "could," "would," "might" or
"will" be taken, occur or be achieved. Such forward-looking statements are
not guarantees or predictions of future performance, and are subject to
known and unknown risks, uncertainties and other factors, many of which are
beyond our control, that could cause actual results, performance or
achievements of any member of the BHP Billiton Group or the enlarged BHP
Billiton Group following completion of the Transactions to differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks and uncertainties include: (i)
the risk that not all conditions of the Offer or the merger will be
satisfied or waived, (ii) beliefs and assumptions relating to available
borrowing capacity and capital resources generally, (iii) expectations
regarding environmental matters, including costs of compliance and the
impact of potential regulations or changes to current regulations to which
Petrohawk or any member of the BHP Billiton Group is or could become
subject, (iv) beliefs about oil and gas reserves, (v) anticipated liquidity
in the markets in which BHP Billiton or any member of the BHP Billiton Group
transacts, including the extent to which such liquidity could be affected by
poor economic and financial market conditions or new regulations and any
resulting impacts on financial institutions and other current and potential
counterparties, (vi) beliefs and assumptions about market competition and
the behaviour of other participants in the oil and gas exploration,
development or production industries, (vii) the effectiveness of Petrohawk`s
or any member of the BHP Billiton Group`s strategies to capture
opportunities presented by changes in prices and to manage its exposure to
price volatility, (viii) beliefs and assumptions about weather and general
economic conditions, (ix) beliefs regarding the U.S. economy, its trajectory
and its impacts, as well as the stock price of each of Petrohawk, BHP
Billiton Plc and BHP Billiton Ltd., (x) projected operating or financial
results, including anticipated cash flows from operations, revenues and
profitability, (xi) expectations regarding Petrohawk`s or any member of the
BHP Billiton Group`s revolver capacity, credit facility compliance,
collateral demands, capital expenditures, interest expense and other
payments, (xii) Petrohawk`s or any member of the BHP Billiton Group`s
ability to efficiently operate its assets so as to maximize its revenue
generating opportunities and operating margins, (xiii) beliefs about the
outcome of legal, regulatory, administrative and legislative matters, (xiv)
expectations and estimates regarding capital and maintenance expenditures
and its associated costs and (xv) uncertainties associated with any aspect
of the Transactions, including uncertainties relating to the anticipated
timing of filings and approvals relating to the Transactions, the outcome of
legal proceedings that may be instituted against Petrohawk and/or others
relating to the Transactions, the expected timing of completion of the
Transactions, the satisfaction of the conditions to the consummation of the
Transactions and the ability to complete the Transactions. Many of these
risks and uncertainties relate to factors that are beyond the BHP Billiton
Group`s ability to control or estimate precisely, and any or all of the BHP
Billiton Group`s forward-looking statements may turn out to be wrong. The
BHP Billiton Group cannot give any assurance that such forward-looking
statements will prove to have been correct. The reader is cautioned not to
place undue reliance on these forward-looking statements, which speak only
as of the date of this communication. The BHP Billiton Group disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, conditions,
circumstances or otherwise, except as required by applicable law.
Nothing contained herein shall be deemed to be a forecast, projection or
estimate of the future financial performance of any member of the BHP
Billiton Group, Petrohawk or the enlarged BHP Billiton Group following
completion of the Offer, the merger and other related transactions unless
otherwise stated.
The SEC permits oil and gas companies to disclose only proved, probable or
possible reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally producible under
existing economic and operating conditions. BHP Billiton uses the term "non-
proved resources base" in this release to refer to reserves other than
proved, probable or possible reserves, which the SEC`s guidelines strictly
prohibit us from including in filings with the SEC, except in connection
with an acquisition. This term includes estimates which are not yet
classified as proved, probable or possible reserves. These estimates are
by their nature more speculative than estimates of proved, probable and
possible reserves and accordingly are subject to substantially greater risk
of being actually realized. Non-proved resources base refers to internal
estimates of hydrocarbon quantities that may be potentially discovered
through exploratory drilling or recovered with additional drilling or
recovery techniques and have not been reviewed by independent engineers and
do not constitute reserves within the meaning of the Society of Petroleum
Engineer`s Petroleum Resource Management System and does not include proved
reserves. Actual quantities that may be ultimately recovered from these
properties will differ substantially. Factors affecting ultimate recovery
include the scope of the ongoing drilling program, which will be directly
affected by the availability of capital, drilling and production costs,
availability of drilling services and equipment, drilling results, lease
expirations, transportation constraints, regulatory approvals and other
factors; and actual drilling results, including geological and mechanical
factors affecting recovery rates. Estimates of the non-proved resources
base may change significantly as development provides additional data.
Investors are urged to consider the disclosures in BHP Billiton`s periodic
filings with the SEC, available from us at Neathouse Place, London, SW1V
1BH, United Kingdom and the Company`s website at www.bhpbilliton.com. You
can also obtain this information from the SEC by calling 1-800-SEC-0330.
Conference Call
BHP Billiton will hold an analyst and investor briefing via teleconference
and webcast at 6:30pm, 14 July, US Central Daylight Time, 9:30am, 15 July,
Australian Eastern Standard Time. The webcast can be accessed via our
website www.bhpbilliton.com and or
US Toll Free 1-877-270-2148.
BHP BILLITON CONTACTS:
Further information on BHP Billiton can be found at: www.bhpbilliton.com.
Sponsor: Absa Capital (the investment banking division of Absa Bank Limited,
affiliated with Barclays Capital)
Media Relations Investor Relations
Australia Australia
Samantha Stevens, Media Relations Andrew Gunn, Investor Relations
Tel: +61 3 9609 2898 Tel: +61 3 9609 3575
Mobile: +61 400 693 915 Mobile: +61 439 558 454
email: email:
Samantha.Stevens@bhpbilliton.com Andrew.Gunn@bhpbilliton.com
Kelly Quirke, Media Relations United Kingdom and South Africa
Tel: +61 3 9609 2896
Mobile: +61 429 966 312 Brendan Harris , Investor Relations
email: Kelly.Quirke@bhpbilliton.com Tel: +44 20 7802 4131
Mobile: +44 7990 527 726
Fiona Martin, Media Relations or +61 437 134 814
Tel: +61 3 9609 2211 email:
Mobile: +61 427 777 908 Brendan.Harris@bhpbilliton.com
email: Fiona.Martin2@bhpbilliton.com
United Kingdom and Americas Americas
Ruban Yogarajah, Media Relations Scott Espenshade, Investor Relations
Tel: US +1 713 966 2907 or Tel: +1 713 599 6431
UK +44 20 7802 4033 Mobile: +1 713 208 8565
Mobile: UK +44 7827 082 022 email:
email: Ruban.Yogarajah@bhpbilliton.com Scott.Espenshade@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 BHP Billiton Plc Registration
077 number 3196209
Registered in Australia Registered in England and Wales
Registered Office: 180 Lonsdale Registered Office: Neathouse
Street Place
Melbourne Victoria 3000 Australia London SW1V 1BH United Kingdom
Tel +61 1300 55 4757 Tel +44 20 7802 4000
Fax +61 3 9609 3015 Fax +44 20 7802 4111
Members of the BHP Billiton Group which is headquartered in Australia
PETROHAWK ENERGY CORPORATION CONTACT:
Joan Dunlap, VP Investor Relations
Tel: 832 204 2737
email: jdunlap@petrohawk.com
Date: 15/07/2011 07:05:22 Produced by the JSE SENS Department.
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