More shale deals going down with the majors, this time Shell is...

More shale deals going down with the majors, this time Shell is in for $5 Billion AUD. Deal includes 250000 acres of undeveloped Eagle Ford shale.

The question remains, who will gobble up AZZ? And for how much?

Shell strikes 3bn shale gas deal
By Adam Jones
Published: May 28 2010 09:35 | Last updated: May 28 2010 09:35
Royal Dutch Shell is increasing its exposure to shale gas through the acquisition of most of the assets of East Resources, a Pennsylvania-based oil and gas company, for $4.7bn (3.2bn).

The Anglo-Dutch energy group also said on Friday that it had picked up further mineral rights from private landowners in a shale gas-rich area of south Texas for an undisclosed sum.

Technological advances in the extraction of gas trapped inside shale rock has created enormous interest in this unconventional energy source.

East Resources is focused on the Marcellus shale area in the north-east US, which is reckoned to cover an area larger than Greece. Its expansion has been partly funded by Kohlberg Kravis Roberts, the private equity investor.

Shell said that the privately-held company currently produced 10,000 barrels of oil equivalent, predominantly in natural gas, from 1m net acres, adding that there was substantial medium-term growth potential.

The mineral rights acquired in south Texas covered about 250,000 undeveloped acres in the Eagle Ford shale gas area, it added. Shells London-listed shares were down 11p at 18.05 in early morning trading on Friday.

Copyright The Financial Times Limited 2010.