Scotia Waterous lands $12-billion U.S. gas deal

The Globe and Mail

Scotia Waterous is making a killing in 2011. And the firm isn't letting up.

Late Thursday BHP Billiton announced that it is buying Petrohawk Energy Corp. for $12.1-billion (U.S.), and Scotia Waterous has advised the buyer. It's the second multi-billion-deal that Scotia Waterous has helped BHP strike in the past few months. Back in February it also helped BHP buy shale assets from Chesapeake Energy Corp. for $4.75-billion.

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Both deals came on the back of two big takeovers in Latin America for which Scotia Waterous advised China's Sinopec.

BHP has been pushing hard to expand its ownership of U.S. shale gas properties. The premium on this deal alone proves that, as BHP is paying a 65 per cent over the price at which Petrohawk last traded. That's good news for Scotia Waterous. The firm has a long standing relationship with BHP, and is well situated to advise on any future deals.

Though, after spending $17-billion in cash over 6 months, it wouldn't be surprising if BHP lays low for a while. Yet there are a number of other shale gas deals that could be completed. As it stands, U.S. shale plays are the equivalent of oil sands properties a few years back. The companies that currently own the land don't have the financial resources for development, and that encourages the big firms to play ball.

After a quick review of previous deals, it looks like the latest BHP deal is the largest international transaction that a Canadian firm has advised on in which both buyer and seller based in Canada. Although Barclays' U.S. team also advised BHP on the deal, Scotia Waterous was the only Canadian player.

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