Royal Dutch Shell PLC (NYSE:RDS-A) has laid out $4.7 billion to acquire privately held East Resources in order to get their hands on the 1.25 million acres in Marcellus Shale controlled by East Resources
"We are enhancing our world-wide Upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions,” Shell's CEO Peter Voser said. “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."
"East Resources' management have built an excellent organization, with high quality assets in the Marcellus, which we are pleased to have as our centrepiece as we enter the premier shale gas play in the north east US,” Voser added. “The opportunity now is to consolidate our tight gas portfolio, divest from non-core positions across North America, and to invest for profitable growth, by deploying Shell's technology and capabilities on a large scale."
An additional 1.3 million tight gas acreage will in their North American portfolio, which now stands at an estimated 2.7 billion barrels of oil and equivalents.
As part of the deal, Shell will also get investment companies Kohlberg Kravis Roberts & Co. and Jefferies & Company.
Regulators will have to approve of the all-cash deal before it is finalized.
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