Royal Dutch Shell Plc  .com Rotating Header Image

Shell Buys U.S. Gas Assets From East Resources for $4.7 Billion

BusinessWeek Logo

By Fred Pals

May 28 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil producer, agreed to buy most of the assets of closely-held East Resources Inc. for $4.7 billion in cash, expanding its portfolio of U.S. unconventional gas deposits.

East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming, according to its website. It has been operating in the Marcellus Shale Area for 25 years.

Companies from India’s Reliance Industries Ltd. to Japan’s Mitsui & Co. are spending billions of dollars on drilling to dislodge natural gas from shale — sedimentary rock composed of mud, quartz and calcite. Shell expects its share of gas in total output to rise to 52 percent in 2012.

“They’ve seen others take material positions in U.S. gas, and this is one way they can also play a part in that business,” said Jason Kenney, head of oil and gas research at ING Commercial Banking in Edinburgh.

The acquisition is the second-biggest oil and gas deal this year, after BP Plc’s acquisition of deepwater assets from Devon Energy Corp. for $7 billion in March, according to Bloomberg data.

“We are enhancing our world-wide upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions,” Chief Executive Officer Peter Voser said in a statement today.

Exxon Mobil Corp., the biggest U.S. oil company, agreed in December to buy XTO Energy Inc., the country’s largest natural gas producer, for $31 billion to gain control of shale-gas assets.

–Editors: Stephen Cunningham, Will Kennedy.

To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]

To contact the editor responsible for this story: Will Kennedy at [email protected]

SOURCE ARTICLE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.