Chevron to expand in US shale gas with $3.2bn acquisition

09 November 2010 13:53  [Source: ICIS news]

TORONTO (ICIS)--Chevron has agreed to acquire US shale gas producer Atlas Energy, the US oil, gas and petrochemicals major said on Tuesday.

Chevron would pay $3.2bn (€2.3bn) in cash and assume pro forma net debt of about $1.1bn for Altas, a producer operating primarily in southwestern Pennsylvania's Marcellus Shale.

US petrochemicals producers are looking to ethane from shale gas as an important source of feedstock for their plants.

"We are acquiring a company that has one of the premier acreage positions in the prolific Marcellus,” said Chevron vice chairman George Kirkland.

“The high quality resource, competitive cost structure in the Marcellus, strong growth potential of the asset base and its proximity to premier natural gas markets make this targeted acquisition a compelling investment for Chevron,"  he said.

"The Atlas Energy assets further advance Chevron's global shale gas position, complementing the company's recent entrance into shale gas opportunities in Poland, Romania and Canada," he added.

In the US, Chevron would assume Atlas Energy's role as 60% operator in Atlas' joint venture with India’s Reliance Industries to develop Marcellus assets, it said. Reliance would continue to fund 75% of the operator's drilling costs, up to $1.4bn, Chevron added.

Overall, Chevron would gain Atlas Energy's 9 trillion cubic feet of natural gas resources, which include approximately 850bn cubic feet of proved natural gas reserves with approximately 80m cubic feet of daily natural gas production, it said.

The acquisition was subject to “certain Atlas Energy restructuring transactions,” approval by Atlas' shareholders and regulatory clearance, Chevron said.

($1 = €0.72)

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By: Stefan Baumgarten
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