Deal Insight
BHP Billiton acquires Chesapeake's Fayetteville Shale assets for US$4.75 billion
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Report summary
BHP Billiton has acquired Chesapeake Energy's Fayetteville Shale position for US$4.75 billion. This is the biggest single asset deal in the shale gas sector to date, and marks a bold step into unconventional resources for BHP. From a valuation perspective, and for its long-term strategic significance, this looks like an excellent deal for the company. We value the upstream assets at US$4.16 billion (NPV10, in 2011 terms), or at an implied long-term gas price of US$5.82/mcf. This at ...
Table of contents
- Executive summary
- Transaction details
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Upstream assets
- Fayetteville Shale
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Deal analysis
- Wood Mackenzie modelling assumptions
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Upsides and risks
- Upsides
- Risks
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Strategic rationale
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BHP Billiton
- BHP organic growth outlook
- Chesapeake
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BHP Billiton
- Oil & gas pricing and assumptions
Tables and charts
This report includes 8 images and tables including:
- Deal analysis: Table 1
- Oil & gas pricing and assumptions: Table 1
- Oil & gas pricing and assumptions: Table 2
- Upstream assets: Table 1
- Wood Mackenzie modelling assumptions
- Deal analysis: Table 2
- Implied Long-term Gas Price sensitivities
- Wood Mackenzie forecast of BHP Billiton production vs. company targets
What's included
This report contains:
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