Each one in plain English, with the numbers worked through for a shareholder.
25 July 2011business combination● NeutralMajor
On July 25, 2011 BHP's subsidiary formally launched its $38.75-per-share cash tender offer for all Petrohawk shares, valued at about $12.16 billion on 303,892,075 shares outstanding plus 9,866,952 shares reserved for options and appreciation rights. The cover page does not state the expiration date, which Petrohawk's own filing sets at midnight August 19, 2011 unless extended. This is the step announced on July 15; shareholders' final treatment is still pending.
Petrohawk's formal report on the July 14, 2011 merger agreement with BHP Billiton: $38.75 cash per share via a tender offer, then a merger for any untendered shares at the same price (shareholders who properly demand appraisal are excluded). The offer needs a majority of shares tendered, U.S. antitrust and CFIUS clearance, and has no financing condition; Petrohawk owes BHP a $395 million fee if the agreement ends under specified circumstances. Seven executives (Wilson, Mize, Herod, Holcombe, Stoneburner, Helm, Elkouri) signed retention agreements effective only when BHP accepts shares; for example Wilson gets a $2,000,000 retention bonus at that point and a later $3,000,000 consulting fee. This confirms the terms of the July 15 announcement.
BHP Billiton filed preliminary materials (press release, presentation, call transcripts and the July 14, 2011 merger agreement) ahead of its planned $38.75-per-share cash tender offer for Petrohawk. The tender offer had not yet begun; this filing carries no new terms beyond the July 15 announcement.
On July 14-15, 2011 Petrohawk agreed to be acquired by BHP Billiton for $38.75 per share in cash through a tender offer, valuing the equity at about $12.1 billion. The board unanimously recommends that shareholders accept. The tender offer is expected to start by July 25, 2011 and needs a majority of shares tendered plus U.S. antitrust and CFIUS clearance. Shares not tendered would be converted into the same $38.75 in the merger, and closing is expected in the third quarter of 2011. This is a proposed deal, not yet completed, so shareholders' treatment is not yet final.
6 July 2011asset acquisition disposition● NeutralMajor
On July 1, 2011 Petrohawk closed the sale of its remaining 50% of KinderHawk to Kinder Morgan and 25% of EagleHawk, for about $920 million ($836 million after closing adjustments). Petrohawk keeps control of EagleHawk and still consolidates it. A fourth credit amendment permits the transfers, keeps the oil and gas borrowing base at $1.8 billion and cuts the midstream part to zero. The pro forma statements show long-term debt falling by $364 million for the KinderHawk sale. This completes the deal announced May 4.
On May 17, 2011 Petrohawk agreed to sell $600 million of 6.25% senior notes due 2019 at face value, for net proceeds of about $589 million; the deal closed May 20, 2011. Lenders waived a credit-agreement rule that would have cut the borrowing base for new debt, so it stays at $1.9 billion. Petrohawk must also register the notes for exchange within 90 days of May 20, or pay extra interest. The filing does not state a use of proceeds.
On May 4, 2011 Petrohawk agreed to sell its remaining 50% of the KinderHawk gathering joint venture to a Kinder Morgan affiliate, and 25% of a new Eagle Ford gathering company called EagleHawk to another Kinder Morgan affiliate, for about $920 million combined, subject to adjustments. EagleHawk will hold the gathering and treating assets for the Hawkville and Black Hawk fields, and Petrohawk's Eagle Ford production will be dedicated to it. Closing was expected around July 1, 2011, subject to third-party consents. This sells the KinderHawk stake first sold in half in May 2010.
Soroban Master Fund LP, Soroban Capital Partners LLC, Eric W. Mandelblatt disclosed a new substantial PETROHAWK ENERGY CORP shareholding (5.40% of votes).
The $400 million add-on of 7 1/4% notes due 2018 closed on January 31, 2011. Petrohawk must file an exchange-offer registration within 90 days and have it effective within 270 days, or pay extra interest. On February 1 it gave notice that it will redeem all $272.375 million of its 7 1/8% notes due 2012 on March 17, 2011 at 100% of face plus accrued interest, funded partly by the new notes. This carries out the plan in the January 20 filing.
On January 14, 2011 Petrohawk agreed to sell Barclays an extra $400 million of its 7 1/4% notes due 2018, adding to the $825 million issued in August 2010, at 100.175% of face for net proceeds of about $400.5 million. It plans to use part of the money to redeem all of its 7 1/8% notes due 2012, with the rest for general purposes, which may include repaying the credit facility. Closing was expected January 31, 2011.
28 Dec 2010asset acquisition disposition● NeutralMajor
On December 22, 2010 Petrohawk sold its Fayetteville Shale gas properties (the position agreed in 2007) to an affiliate of XTO Energy for $575 million in cash before adjustments, effective October 1, 2010, and XTO agreed to buy the Fayetteville midstream assets for about $75 million, expected to close in the first quarter of 2011. A second credit amendment clarifies permitted asset sale provisions, and the oil and gas borrowing base is now about $1.55 billion (down from $1.75 billion) after the sale. This resolves the Fayetteville open thread; the pro forma shows about $129 million of debt paydown from the upstream proceeds.
Effective November 8, 2010 Petrohawk amended its August 2010 credit agreement, setting the borrowing base on its oil and gas properties at about $1.75 billion. The amendment let new lenders into the $2.0 billion facility and reallocated each lender's commitments.
The $825 million 7 1/4% notes due 2018 closed on August 17, 2010, and about $689 million of the proceeds was used to buy back $652.7 million (about 84.9%) of the 9 1/8% notes due 2013 that holders tendered. Petrohawk will redeem the remaining $115,985,000 on September 20, 2010 at 104.563% of face, and expects about $84.5 million of charges in the third quarter of 2010. Remaining 2013 note holders also lose protective covenants through the amended indenture. It must also offer to exchange the new notes for registered ones (file within 90 days, effective within 270 days) or face extra interest.
On August 3, 2010 Petrohawk agreed to sell $825 million of 7 1/4% Senior Notes due 2018 to initial purchasers led by Barclays Capital in a private placement, at 100% of face value, for net proceeds of about $809.3 million. The filing does not state the use of proceeds here (the next filing links it to buying back the 2013 notes).
On August 2, 2010 Petrohawk replaced its October 2009 credit agreement with a Fifth Amended and Restated $2.0 billion revolver, with an initial available borrowing base of about $1.05 billion. Borrowing costs are slightly lower (LIBOR plus 2.00-3.00% versus 2.25-3.25%) and maturity extends from July 1, 2013 to July 1, 2014. It remains secured by first-priority liens on substantially all assets, with the same 2.5x interest coverage and 1.0x current ratio covenants.
27 May 2010asset acquisition disposition▲ GoodMajor
On May 21, 2010 Petrohawk closed the KinderHawk joint venture: it put its Haynesville Shale gathering and treating business into the new company, and Kinder Morgan's affiliate contributed $921 million in cash, which was paid out to Petrohawk (higher than the $875 million first announced). Each side owns 50%, Petrohawk must deliver at least 50% of projected production from covered wells for five years, and each side must fund up to $201.3 million of further capital contributions across 2010-2011, less amounts spent before closing. This resolves the pending joint venture thread; the pro forma balance sheet shows long-term debt falling by $579 million, which the filing's adjustment note ties to the proceeds.
On May 24, 2010 Petrohawk said its Kinder Morgan Haynesville midstream joint venture ($875 million) and the $320 million Terryville Field sale had closed, bringing 2010 asset sales to about $1.37 billion against a $1 billion target. It also lowered 2010 production guidance to 650-660 MMcfe/d from 670-680 and gave 2010-2012 capital spending guidance, with 2010 at $2,130 million.
On May 17, 2010 Petrohawk amended its October 2009 credit agreement so the KinderHawk joint venture can close, expressly permitting the transfer of the Haynesville gathering business and required capital contributions. The filing says the borrowing base is about $1.3 billion after the sale of interests in the Terryville and WEHLU fields (a sale not described in earlier filings here), and will be $1.05 billion once the joint venture closes, as the midstream portion falls to about $50 million.
On April 12, 2010 Petrohawk agreed to put its Haynesville Shale gathering and treating business in Northwest Louisiana into a new 50/50 joint venture, KinderHawk Field Services, with an affiliate of Kinder Morgan Energy Partners, which will contribute $875 million in cash, paid out to Petrohawk. Petrohawk must supply at least 50% of its projected Haynesville production for five years, pay a $0.34/Mcf gathering fee, and fund up to $201.3 million of capital contributions in 2010-2011. Closing is expected by the end of May 2010, subject to antitrust and other conditions.
