BHP Billiton Limited(BHP) announced an off-market tender to buy back shares under its expanded US$10 billion capital management program.

In February, the company authorized a substantial capital management program of US$10 billion, expected to be completed by the end of 2011.

Last year, BHP revived its preceding share repurchase program of US$13 billion, under which US$4.2 billion was left. On December 14, 2007, the program was suspended and the total share repurchases were 384,724,355 for US$8.8 billion.

As per the latest information, the revived program added 31,836,174 shares to the total repurchase for approximately US$1.2 billion.

With the successful completion of both the share repurchase programs which totalled US$23.0 billion, BHP should be able to pass on the returns to shareholders as well.

BHP Billiton completed the acquisition of Chesapeake Energy Corp.’s (CHK) stake in Fayetteville Shale, a natural gas reservoir for $4.75 billion.

The acquisition was completed in the first quarter of 2011, a quarter earlier than previously estimated.

According to the terms of the agreement, Chesapeake will provide a 12 month service agreement to BHP Billiton.

Management expects that the acquisition will accrete gas reserve and resource base by 45%. This acquisition would allow the company to enter the US shale gas business and establish BHP Billiton as a major shale gas producer in North America.

BHP Billiton is one of the world’s largest diversified resource companies with operations spanning several continents. It has interests in mineral exploration, production and processing, oil and gas exploration and development, and steel production and merchandising.

We remain positive on BHP Billiton’s long-term potential. However, the recent floods that broke out in Australia have forced closure of mines, resulting in reduced production, particularly during the period of all-time high metal prices.

BHP Billiton has a Zacks #3 Rank, which implies a Hold rating on a short-term basis (1-3 months). In the long term (6-12 months), the stock has a Neutral recommendation.

 
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