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BHP Billiton agrees merger with Petrohawk Energy

BHP Billiton is to acquire Petrohawk Energy, potentially doubling its existing resource base.

BHP Billiton has entered into a definitive merger agreement to acquire shale gas company Petrohawk Energy Corporation.

The transaction, which has a total equity value of $12.1 billion (£7.5 billion), has been recommended to shareholders by the Petrohawk board of directors.

Once the deal is completed, BHP will have operate positions within Eagle Ford and Haynesville shales, and the Permian Basin, which has estimated net production for 2011 of 950 million cubic feet equivalent per day.

J Michael Yeager, chief executive of BHP Billiton Petroleum, said: «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.»

He also gave reassurance that Petrohawks US work force would be retained if the transaction, expected to close in the third quarter of 2011, proceeds as planned.

BHP Billiton Petroleum currently operates in more than a dozen countries, including deepwater assets in the Gulf of Mexico and prospects in the South China Sea, Trinidad and Tobago, Algeria, Pakistan, and Malaysia