BHP to Close $4.75 Billion Shale-Gas Deal in Quarter

Anglo-Australian mining titan BHP Billiton Ltd. expects to close its purchase of Chesapeake Energy Corp.'s Fayetteville shale-gas holdings in Arkansas by the end of the first quarter, according to a BHP presentation Monday.

Alex Vaneslow, BHP's chief financial officer, said in a BMO Global Metals & Mining Conference presentation on the company's website that BHP "targeted closing [the deal] by end of first quarter 2011, conditional upon regulatory approval."

BHP said last week said it expected to close the $4.75 billion all-cash deal sometime in the first half of 2011.

Mr. Vaneslow said in his presentation that no other third-party approvals are required and substantial due diligence had already been performed on the assets to date.

The deal gives BHP 487,000 net acres of shale-gas assets, including 415 million cubic feet of gas production a day, 2.4 trillion cubic feet of proven reserves and about 10 trillion cubic feet or risked resource.

The deal would increase BHP's gas reserves and resources by about 46%, according to data provided in the presentation. BHP's energy assets, which include energy coal, oil and gas, accounted for 21% of the company's underlying earnings before interest and taxes, or EBIT, for the fiscal first half ended Dec. 31, 2010.