Chesapeake Buyer Makes Another Acquisition

The Australian firm buying Chesapeake Energy’s Arkansas assets appears embroiled in another move that could be 10 times larger than the announcement made here in late February.

BHP Billiton Petroleum is reportedly in talks to take a significant stake in Australian-based Woodside Petroleum Ltd. for $49.14 billion. Woodside is Australia’s second largest oil and gas producer.

“We don’t comment on market speculation,” Amanda Buckley, a spokeswoman for BHP Billiton tells Bloomberg News. Linda Hammer, a spokeswoman for Perth-based Woodside declined to comment.

On February 21, Oklahoma City-based Chesapeake Energy Corp. announced it had agreed to sell its Arkansas gas interests to BHP Billiton for $4.75 billion in cash.

The deal involved Chesapeake’s interests in approximately 487,000 net acres of leasehold and producing natural gas properties in the Fayetteville Shale play in central Arkansas. Chesapeake is the second largest stakeholder in the unconventional natural gas play.

The transaction 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 Fayetteville shale is a world-class onshore natural gas resource,” J. Michael Yeager, CEO of BHP Billiton Petroleum, said at the time. “The purchase of this long-life field immediately adds over 10 trillion cubic feet of gas resources to our portfolio and is consistent with our strategy of investing in large, low cost assets with significant volume growth for future development.”