Soroban Capital Partners Reports Massive Stake in PetroHawk Energy

Apr.13.11 | About: Halcon Resources (HK)

Soroban Capital Partners reported a 16,357,600 share stake in Petrohawk Energy Corporation (NYSE:HK) through a Schedule 13G filed on April 11, 2011. The stake is 5.4% of shares outstanding and it makes Soroban Capital the natural gas company's largest shareholder. Based on Petrohawk's current price of $22.85, the position has a notional value of $373.77 million.

Soroban Capital Partners launched in November 2010 and has around $1.1 billion under management. We do not know what kind of leverage the firm employs and what positions they may have offsetting the long position, but the $373.77 million position is HUGE relative to the reported assets under management. Petrohawk Energy has often been mentioned as a possible acquisition target. It will be interesting to see how this investment develops.

Soroban is headed by Eric Mandelblatt who started at Goldman Sachs (NYSE:GS) in 1998 as an energy analyst. He later worked for the firm's principal strategies group as the chief operating officer. In 2005, Mandelblatt worked with former Goldman alum at TPG-Axon Capital Management LP. Mandelblatt is running Soroban with other TPG alum, Scott Friedman and Gaurav Kapdia.

Natural gas companies have been the subject of special situations. EXCO Resources (NYSE:XCO) is currently evaluating a management led buyout offer from its CEO Douglas Miller that values the company at $20.50 per share in cash. We have written several articles about the EXCO buyout, most recently discussing the management's strong incentive to close the deal (click here).

Famed investor Carl Icahn was briefly the largest shareholder in Chesapeake Energy (NYSE:CHK) but scaled back his position after the stock rallied sharply following corporate actions that reduced balance sheet leverage. (click here).

Disclosure: I am long XCO. I may initiate a long position in HK over the next 72 hours.