Saturday, May 29, 2010

Shell buys US company East Resources for $4.7 bln

Shell’s Environmental Devastation in Nigeria

First it was Exxon-Mobil buying big into the Marcellus Shale gas play, now it is Europe's largest oil company, Royal Dutch Shell. This is yet another blow to the waning concept of US energy independence from Marcellus Shale, with other recent foreign investments from Singapore, India, Norway and Japan.

Shell buys US company East Resources for $4.7 bln
(AP) – 2 hours ago

AMSTERDAM — Royal Dutch Shell PLC says it has agreed to buy East Resources Inc., a major owner of shale gas holdings in the United States, for $4.7 billion from private investors.

Shell says it will pay cash for the company, which is capable of producing the equivalent of 10,000 barrels of oil per day in Marcellus Shale, which extends over large parts of the northeastern United States.

Shell said Friday it was buying the company from East Resources itself, from Kohlberg Kravis Roberts & Co., and from Jefferies & Company.

Europe’s largest oil company, Royal Dutch Shell, announced it was buying East Resources for $4.7 billion, if the deal is approved by regulators. Shell started buying tight shale gas assets in 2001 and now owns 3.6 million acres in North America.

You may recall that the East Resources' background includes large political donations from the CEO's wife, Kim Pegula. Her most notable recent donation was $180,000 donation to 'Tom Corbett for Governor.'

A look back at East Resources based in Warrendale, Pa:

East Resources, Inc. became a Pennsylvania corporation in 1983, with the corporation's first Pennsylvania wells drilled in 1984. East expanded operations into West Virginia in 2000 with key acquisitions, including some Pennzoil properties, and is now the largest Appalachian Basin oil producer.

The corporation now owns and operates nearly 2,500 oil and gas wells in Pennsylvania, New York, West Virginia and Colorado, with exploratory drilling beginning in Wyoming in 2005. East Resources has offices in Warrendale Pa, Allegany New York, Parkersburg WV, and an exploratory office in Denver Colorado opened in 2004.

Northern Pipeline Company LLC is owned by East, with most of its pipelines located in western Pennsylvania. East is also an owner in two natural gas processing plants in northern Pennsylvania, and operates a public natural gas utility serving over 5,000 West Virginia customers with over 1,000 miles of pipelines.