Friday, May 28, 2010

Shell to Buy East Resources

Shell Oil  has entered into an agreement to buy East Resources, a big player in the Marcellus Shale, for $4.7 billion.  Last year, private equity investor KKR made a minority investment of $350 million in East that looks to be a big winner.  Along with the company's 1.25 million acres in the Marcellus, East has some leases in the Eagle Ford Shale. 

The deal further emphasizes the importance of shale gas as part of the energy future.  As the supermajors struggle to find profitable projects internationally, they see shale plays as more reliable (maybe more expensive) deals in a safe environment. 

Hopefully Shell will complete their Marcellus wells a little more diligently than they do in the Haynesville with SWEPI, LP.

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