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BHP Billiton entering Fayetteville Shale Play.

BHP Billiton Limited of Australia, which last week announced its plans to purchase Chesapeake Energy's Fayetteville Shale Play assets, expects to keep all of the Oklahoma City company's Arkansas employees as well. Ruban Yogarajah, who handles U.S. media inquiries for BHP Billiton, said in an e-mail to Arkansas Business that the company would extend employment offers to all of Chesapeake's Arkansas employees. "We don't anticipate any job losses, in fact we expect to grow the business," Yogarajah said. BHP Billiton will purchase Chesapeake's Fayetteville Shale assets for $4.75 billion in cash, just shy of Chesapeake's expected proceeds of $5 billion. According to a company news release, Chesapeake has also agreed, as part of the deal, to provide essential services for BHP Billiton's Fayetteville properties for up to one year, for an agreed-upon fee.

The transaction, which includes Chesapeake's interests in 487,000 net acres of leasehold and producing natural gas properties, marks BHP Billiton's first entry into the U.S. shale gas business. The transaction also includes existing net production of about 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. Micheal Yeager, chief executive of BHP Billiton Petroleum, a division of BHP Billiton Limited, said in a news release. "The operated position we are obtaining will immediately make BHP Billiton a major North American shale gas producer."
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Title Annotation:Inside Business
Author:Kauffmann, Joanna
Publication:Arkansas Business
Geographic Code:1U5VA
Date:Feb 28, 2011
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