Investopedia: A Win-Win For Chesapeake and BHP?

Whenever a significant deal is announced between two companies, there is an immediate interest in figuring out which company got the best of the deal. When looking at Monday's transaction between BHP Billiton (NYSE:BHP) and Chesapeake Energy (NYSE:CHK), investors should keep an open mind with respect to the notion that maybe both parties are getting something they need out of this transaction. 

The Terms of the Deal
In the deal announced Monday evening, Chesapeake achieved its stated goal of selling its 75% interest in the Fayetteville shale, a gas-rich area extending across Arkansas. Chesapeake is selling this asset base to Australian mining major BHP Billiton for $4.75 billion in cash, and the two companies will execute a service agreement to assure a smooth transition in operations.

BHP Billiton is acquiring about 2.5 trillion cubic feet (natural gas equivalent) of proven reserves, with a total potential reserve base of maybe 10 trillion cubic feet. The deal also includes related midstream assets, but the companies did not provide a breakdown of value assignment in the press release.

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