(Alliance News) - Royal Dutch Shell PLC said Monday it is selling its Appalachia shale gas assets, in the US, for USD541 million.
Shell, through its affiliate SWEPI LP, has agreed to sell its integrated upstream and midstream assets in Pennsylvania to US firm National Fuel Gas Co.
"Divesting our Appalachia position is consistent with our desire to focus our Shales portfolio," said Shell Upstream Director Wael Sawan. "While we maximise cash in the current environment, our drive for a competitive position in Shales continues. It is a core part of our Upstream portfolio along with the Deep Water and Conventional oil and gas businesses."
The deal is expected to close July 31, National Fuel said, with an effective date of Jan. 1.
The deal will be made in cash, but National Gas has the option to provide up to USD150 million of stock as consideration.
The transaction includes the transfer of about 450,000 net leasehold acres across Pennsylvania, with approximately 350 producing Marcellus and Utica wells in Tioga County and associated facilities.
The assets have a net proved developed natural-gas reserves of approximately 710 billion cubic feet and produce 215 million
to 230 million cubic feet per day.
National Gas noted the assets are "geographically contiguous and highly synergistic to existing Tioga County operations, and firm transportation capacity on the company's Empire Pipeline system."
The assets are expected to generate net natural gas production in the range of 70 billion cubic feet to 75 billion cubic feet over the following twelve months.
By Paul McGowan; paulmcgowan@alliancenews.com
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