Shell swoops in $4.7bn deal to tap US shale gas reserves
Saturday 29 May 2010
Royal Dutch Shell has increased its holding of unconventional "shale gas" by buying a privately owned US company – East Resources of Pennsylvania – for $4.7bn (£3.2bn).
As well as taking over one million acres of land in the East Resources deal, the oil major bought another 250,000 acres of mineral rights at the Eagle Ford shale play in south Texas. Taken together, the new reserves have the potential to yield more than 2.7 billion barrels of oil equivalent (boe).
East Resources operates more than 2,500 wells producing oil and gas in New York, Pennsylvania, West Virginia and Colorado, and is exploring drilling programmes in Wyoming.
Recent technical breakthroughs in extracting natural gas from shale – sedimentary rock composed of mud, quartz and calcite – have changed the economics of the unconventional reserves, prompting a rush of interest from oil and gas companies.
Peter Voser, the Shell chief executive, said its latest deals were intended to enhance its portfolio for "profitable growth". "These acreage additions form part of an ongoing strategy, which also includes divestments, with an objective to grow and to upgrade the quality of Shell's North America tight gas portfolio," he added. "The opportunity now is to consolidate our tight gas portfolio, divest from non-core positions across North America, and to invest for profitable growth, by deploying Shell's technology and capabilities on a large scale."
Shell first showed interest in shale gas in 2001, with the acquisition of reserves in Wyoming, and massively increased its holding in 2008 with the purchase of Duvernay. Last year, the group's US shale gas production hit 140,000 boe per day – 62 per cent more than the year before.
Shell's target is to reach annual production of more than 400,000 boe per day by 2020 "subject to annual investment rates". Yesterday's acquisitions boosted its total US shale gas portfolio to 3.6 million acres.
- 1 British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Vivienne Westwood says 'Yes' to Scottish Independence by declaring: 'I hate England'
- 3 Welcome to Cameroon, where drinking Baileys can lead to imprisonment
- 4 Lego breaks out of the toy box and heads for the gallery
- 5 Vogue under fire for 'Big Booty' article
British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Vivienne Westwood says 'Yes' to Scottish Independence by declaring: 'I hate England'
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...