Chevron to buy Marcellus Shale acreage
04 May 2011
US oil giant, Chevron today said that it will buy 228,000 acres in the Marcellus Shale from Chief Oil & Gas LLC and Tug Hill, Inc, for an undisclosed sum.
The acreage, which is principally located in southern Pennsylvania, will give Chevron an estimated five trillion cubic feet of additional natural gas resource in its Marcellus Shale operations.
Although the San Ramon, California-based oil company did not disclose the terms of the deal, analysts said that earlier deals in Marcellus Shale have been done at around $14,000 per acre.
George Kirkland, vice chairman, Chevron, said, "This opportunity is aligned with our strategy to acquire early-in-life assets with long-term organic growth potential. Over the last year, Chevron has acquired nearly five million net acres of shale gas assets in the US, Canada, Poland and Romania."
"This expansion of our shale gas portfolio gives us additional high-quality resources with strong growth potential, as well as proximity to and synergy with existing operations," said Gary Luquette, president of Chevron North America Exploration and Production Company.
Early this year, Chevron acquired natural gas producer Atlas Energy for $3.2 billion in cash and assumed pro forma net debt of approximately $1.1 billion.
The deal gave Chevron, the second-largest US oil and gas company, access to around 9 trillion cubic feet of natural gas in the shale fields in the eastern US.