Shell sells shale gas rights in Louisiana, Wyoming for US$2.1 billion
By Jonathan Fahey
August 16, 2014, 12:02 am TWN
By Jonathan Fahey--Royal Dutch Shell has agreed to sell drilling rights in shale formations in Louisiana and Wyoming for US$2.1 billion in two transactions.
In one of the deals, announced Thursday, Shell will also receive drilling rights to land in Ohio and Pennsylvania.
Shell is working to focus its onshore U.S. drilling program on a few of the more prolific formations in an effort to boost profitability. The company wrote down the value of its shale acreage in the U.S. by US$2.1 billion last year amid lower natural gas prices.
Shell will sell its Pinedale acreage in Wyoming to Ultra Petroleum for US$925 million and 155,000 acres in the Utica and Marcellus shale formations in Ohio and Pennsylvania.
It will sell its Haynesville acreage in Louisiana to Vine Oil & Gas and the investment firm Blackstone for US$1.2 billion.
Shell and other major oil and gas explorers regularly sell rights to fields where production is flat or declining. They then use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth. The Pinedale and Haynesville formations produce dry gas, which is less profitable than oil or so-called natural gas liquids, at relatively moderate rates.