Anglo-Dutch oil giant Royal Dutch Shell acquired some Texan assets from US titan Chesapeake Energy on Wednesday for a price of nearly two billion dollars.
The company said that the $1.935bn acquisition marks a further step in its strategy to build "a leading portfolio of shale assets rich in oil and natural gas liquids".
Shell has acquired 618,000 net acres of acreage in the Permian Basin in West Texas. The assets, which currently produce 26,000 barrels of oil equivalent per day, are said to have "significant" growth potential.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"The acquisition provides both existing production and near-term growth potential from a proven resource, as well as promising opportunities for expansion," Shell said in a statement.
Chesapeake announced that it was selling off $6.9bn-worth of assets today, as it attempts to deal with an estimated $10bn funding gap. As part of this bumper sale, both Chevron and EnerVest are acquiring assets in the Permian Basin.
A "portion" of the proceeds from today's deals will be used to fully repay its $4bn of term loans during the fourth quarter this year, the US firm said.
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
-
What does Rachel Reeves’s plan for growth mean for UK investors?Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
