Shell Selling Mature Gas Assets to Focus on Pennsylvania Shale
As predicted by market watchers, Shell has revealed plans to sell off some of its portfolio of natural gas holdings to focus on the Marcellus and Utica shale formations in the northern part of the US state of Pennsylvania.
The energy and chemicals group will sell drilling rights to mature gas producing areas in Wyoming and Louisiana in separate deals for $2.1 billion in cash as well as sites in two Pennsylvania counties where it operates gas wells.
Earlier, Shell said it was selling 208,000 acres in western Pennsylvania and eastern Ohio to Rex Energy for $120 million.
A Shell spokesperson told local media that the moves are part of the group's regular review of its mix of energy production assets. It plans to focus its onshore drilling program on a few of the more prolific formations to boost profitability.
Shell wrote down the value of its shale acreage in the US by $2.1 billion last year as natural gas prices dropped.
In a written statement, Upstream Americas director Marvin Odum said the group is adding "highly attractive" exploration acreage, where it has "impressive" drilling results and divesting more mature dry gas positions.
The Pinedale acreage in Wyoming and the land in Pennsylvania's Potter and Tioga counties is being sold to Houston-based Ultra Petroleum for $925 million. In exchange, Shell will acquire 100% of a joint venture with Ultra in northern Pennsylvania.
In a second deal, Shell's gas assets in northern Louisiana are being sold to Dallas-based Vine Oil & Gas for $1.2 billion.