Shell buys East Resources in Warrendale for $4.7B
AMSTERDAM — Royal Dutch Shell PLC said today it will buy East Resources, a major owner of shale gas holdings in the northeast United States, for $4.7 billion from private investors. East Resources is based in Warrendale.
Europe's largest oil company said it will pay cash for East Resources, which produces oil and gas equivalents of 10,000 barrels of oil per day, mostly in Marcellus Shale, which extends over large parts of the northeastern United States.
Shell said it was buying the company from Kohlberg Kravis Roberts & Co., as well as Jefferies & Company and privately held East Resources itself. The deal must be approved by regulators.
Shell CEO Peter Voser said the acquisition fit with plans to "grow and upgrade the quality of Shell's North America tight gas portfolio."
"Tight" gas is natural gas located in areas that are difficult or expensive to exploit, trapped behind hard-to-drill sandstone or shale.
Shell, like major competitors Exxon and BP, has been expanding its portfolio of tight gas as other options run out and technology improvements make it more feasible to extract.
