Royal Dutch Shell B (LON:RDSB) has boosted its North America tight gas portfolio with new positions in high-potential US shale gas acreage in the Marcellus and Eagle Ford plays. The group has agreed to acquire subsidiaries owning the business of East Resources, Inc for $4.7bn cash.
East Resources is a privately-owned business with its primary activity focused on the Marcellus shale in the northeastern US. Shell says it has around 10,000 barrels oil equivalent per day of production, predominantly in natural gas, with substantial medium-term growth potential. The group has also acquired 1,000 sq km of mineral rights in the Eagle Ford shale play, South Texas, in 2010. It says the undeveloped acreage positions are in the liquids-rich window of the Eagle Ford play. Shell will be the operator and will be able to integrate the new assets into its existing South Texas operations.
Shell's chief executive, Peter Voser said: "We are enhancing our world-wide upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions. 'These acreage additions form part of an on-going strategy, which also includes divestments, with an objective to grow and to upgrade the quality of Shell's North America tight gas portfolio."
Before the additions, Shell projected that its North America tight gas production could reach more than 400,000 boe/d by 2020. The new acreage will bring its total North America tight gas position to around 3.6m acres.
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