Royal Dutch Shell (ticker: RDS.A) is shifting around its U.S. onshore assets.
Yesterday, the company announced it will acquire 155,000 net acres in the Pennsylvania Marcellus and Utica from Ultra Petroleum (ticker: UPL). Ultra agreed to pay Shell $925 million for 100% of Shell’s Pinedale asset in Wyoming.
In separate agreement, Shell has agreed to sell 100% of its Haynesville asset in Louisiana for $1.2 billion to Vine Oil & Gas LP and Blackstone.
“We continue to restructure and focus our North America shale oil and gas portfolio to deliver the most value in the longer term. With this announcement we are adding highly attractive exploration acreage, where we have impressive well results in the Utica, and divesting our more mature, Pinedale and Haynesville dry gas positions,” said Marvin Odum, Shell’s Upstream Americas Director in a company news release.
During the first half of 2014, Ultra’s net production from its divested Pennsylvania assets Shell averaged 109 MMcf/d (19 MBOEPD). The Shell net production from Pinedale in the second quarter 2014 was 190 MMcf/d of dry gas (32 MBOEPD).
Shell’s Pinedale asset (which includes 19,000 net acres of leasehold interest, 1,108 gross wells and associated facilities, and an average of 0.7 percent overriding royalty interest in 11,500 acres) will be exchanged for cash and Ultra’s 100 % interest in the Marshlands area (63,000 net acres) as well as its entire interest (92,000 net acres) in the Tioga Area of Mutual Interest (AMI), an unincorporated joint venture with Shell. After completion of this transaction, Shell will have a 100 percent interest in the Tioga AMI. The agreement is effective April 1, 2014, and is expected to close this year.
Shell’s Haynesville asset includes 107,000 net acres in in north Louisiana. The transaction includes 418 producing wells, 193 of them operated by Shell. As of 1 July 2014, the gross production from the Haynesville asset was approximately 700 MMcf/d of dry gas, with Shell’s net working interest share at approximately 250 MMcf/d (43 MBOEPD). The agreement is effective July 1, 2014, and is expected to close in Q4’14.
The sales are part of Shell’s larger plan to shed $15 billion in assets around the world, according to PetroGlobal News.
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