Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, July 15, 2011

Article Excerpt

BHP BILLITON LTD. ADRs, $91.08, New York symbol BHP, is buying Petrohawk Energy Corp. (New York symbol HK), which produces oil and natural gas from properties in Texas and Louisiana. The $12.1-billion purchase price is equal to 5% of BHP’s $242.6-billion market cap. The company held cash of $16.6 billion at December 31, 2010, so it can comfortably afford this acquisition. BHP expects to close the deal by September 30, 2011. BHP is mostly a mining company, but is expanding its oil and gas operations. This purchase will give BHP control of roughly one million acres in the large Haynesville, Eagle Ford and Permian Basin shale-gas discoveries. (Shale gas is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas.) Petrohawk’s shale-gas reserves have strong long-term potential, and BHP has the funds to accelerate their development. BHP Billiton is still a hold. ALCOA INC.,…