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 ...

What's included

This report contains

  • Document

    BHP Billiton acquires Chesapeake's Fayetteville Shale assets for US$4.75 billion

    PDF 442.88 KB

Table of contents

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 8 images and tables including:

Images

  • Wood Mackenzie modelling assumptions
  • Implied Long-term Gas Price sensitivities
  • Wood Mackenzie forecast of BHP Billiton production vs. company targets

Tables

  • Deal analysis: Table 1
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1
  • Deal analysis: Table 2

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