Shell continued to shuffle its onshore US upstream assets this week in a trio of deals worth about $2.25bn.
In one deal Houston-based independent Ultra Petroleum paid Shell $925mn and handed over 155,000 acres in the Marcellus and Utica shales in Pennsylvania in exchange for Shell's stake in the Pinedale natural gas field in Wyoming. The Marcellus and Utica acreage produced an average of 109mn cf/d in the second quarter of 2014 while the Wyoming acreage produced an average of 190mn cf/d.
In another deal Shell sold all of its Haynesville shale assets in Louisiana to Vine Oil & Gas, a newly formed company backed by private equity firm Blackstone, for $1.2bn. The Haynesville assets include 418 producing wells and production of about 700mn cf/d of gas.
And earlier this week Shell sold its interest in 207,000 acres in the Marcellus and Utica shale in Pennsylvania and Ohio to Rex Energy for $120mn. Those assets include up to 16mn cf/d of production.
The deals reflect both Shell's efforts to restructure its US onshore shale business following a $2.2bn write-down last year, and the scramble among smaller players to consolidate existing holdings.
Shell is seeking to shed natural gas production in favor of fields with more oil and natural gas liquids. In contrast Ultra is already a natural gas-centric producer with large holdings in Wyoming even before the deal with Shell. Rex is also more focused on natural gas and owns acreage in Butler County, Ohio, near the assets it purchased from Shell.
Vine's purchase of Shell's Haynesville echoes the renewed interest by a small group of producers in dry-gas shales that fell out of favor when gas prices plummeted in recent years.
Chesapeake Energy, the second-largest producer of US natural gas by volume behind ExxonMobil, began this year to ramp up the development of the Haynesville, finding that improved drilling techniques were making wells there competitive with those in its other operating areas. The Haynesville is also close to a number of LNG export projects that are being built along the US Gulf coast.
tdf/dcb
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