BHP Pays $4.75B For Chesapeake Assets

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BHP Billiton, the world's largest mining company, said it will pay $4.75 billion to acquire 487,000 net acres of Fayetteville Shale properties owned by Chesapeake Energy, the second-largest U.S. natural gas producer, as part of the Anglo-Australian mining giant's plans to purchase more oil and gas assets.

While BHP (BHP) CEO Marius Kloppers recently said his company would take a break from big deals for a while to focus on $80 billion in organic growth, he did tell an Australian business program over the weekend that the oil and gas market would be one his company would be looking to for opportunities.

Oklahoma-based Chesapeake (CHK), the second-largest producer in the Fayetteville Shale, has been actively selling natural gas assets to raise cash so it can devote more of its resources to oil production.

In January, Chesapeake sold $570 million in shale assets in Colorado and Wyoming to China's Cnooc (CEO). That deal came after Chesapeake sold shale assets in South Texas to Cnooc for over $1 billion in October 2010. In early 2010, Chesapeake sold over $2 billion in shale assets to France's Total (TOT), Europe's third-largest oil company.

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.