At the start of last year Marius Kloppers had $10 billion burning a hole in his pocket. Rebuffed in attempts to acquire mining rival Rio Tinto as well as Potash Corp. of Saskatchewan, the chief executive of BHP Billiton needed a big deal to deploy the $24 billion in profits the company had piled up last year feeding China’s insatiable appetite for natural resources. 

He found it in Arkansas, shelling out $4.75 billion to acquire gas giant Chesapeake Energy’s acreage in the Fayetteville Shale. Then in July he bet again, paying $15 billion—a 65% premium to market value—for Petrohawk Energy and its accumulation of prime shale fields in Louisiana and Texas. Though BHP had zero experience drilling for shale gas, the deals suddenly made the world’s largest and richest mining company, headquartered in Melbourne, Australia, one of the 15 largest natural gas producers in America. Even for Kloppers, who’s a 19-year veteran of BHP Billiton and known for his steeliness in building one of the most powerful commodities companies of the past half-century, it all looks risky—maybe too risky.

Evy Hambro, manager of a $30 billion mining fund at BlackRock, wondered aloud last fall what BHP had gotten his clients into. “We are waiting to be educated by BHP on these transactions,” Hambro said at a Melbourne conference in October. “When you start putting something on your stall that you’ve never told investors about, people are naturally a bit reserved. So when you are suddenly exposed to shale gas, you want to know why.”