Shell Buys PA-Based Natural Gas Exploration Company

By PETER LATTMAN and GUY CHAZAN

Royal Dutch Shell PLC said Friday it has agreed to buy East Resources Inc., a closely held U.S. natural-gas explorer, for $4.7 billion, in a transaction that underscores the frenzied global interest in North American shale-gas production.

Warrendale, Pa.-based East Resources is one of the biggest players in a natural-gas exploration area known as the Marcellus Shale, with control of 1.25 million acres across a territory that stretches from West Virginia to New York. ...

From Money Morning, June 1, 2010:

"Shell, Europe’s largest energy producer, gets 1.05 million acres of gas properties in the northeastern United States and Texas. About 650,000 acres gained in the acquisition are part of the crucial Marcellus Shale, a tight gas property with shale formations estimated to hold up to 262 trillion cubic feet of recoverable gas.

The remaining acres are part of the Eagle Ford Shale area in South Texas. The deal brings Shell’s total U.S. tight gas acreage up to 3.6 million acres. ...

The move into shale gas allows Shell to remain competitive with industry giant Exxon Mobil Corp. (XOM: 60.45 -0.01 -0.02%), which in December paid $31 billion for XTO Energy Inc. (XTO: 42.69 -0.05 -0.12%), the largest U.S. natural gas producer. The deal will increase Shell’s daily gas production by 7.5%." -Kerri Shannon, Associate Editor, Money Morning

North American natural gas currently accounts for about 7.8% of Shell’s global oil and gas production. Shell has pursued several deals in the North American gas market in recent years, buying Canada’s Duvernay Oil Corp. in 2008, and teaming up with Encana Corp. to develop acreage in Louisiana’s Haynesville Shale exploration area. Shell officials have said they believe that while gas prices are low now, in the long-term they will recover.

Foreign energy companies have moved aggressively on to the scene. Last month, India’s Reliance Industries ltd. invested $1.7 billion for a 40% stake in a joint venture with Atlas Energy inc., which controls about 584,000 acres in the Marcellus. In February, Japan’s Mitsui & Co. announced a deal with Anadarko Petroleum Corp. in which it will invest about $1.4 billion to develop shale gas in the region. ...

Did someone say something about American energy independence? ...WHAT WAS IT?

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DEMAND ACCOUNTABILITY!