Chevron has agreed to buy US natural gas producer Atlas Energy for $3.2bn (£1.9bn), excluding debt, becoming the latest energy giant to break into into the lucrative Marcellus shale field.
The field in Pennsylvania and surrounding states, one of the largest US natural gas finds in decades, has attracted a crush of industry heavyweights that are betting that the fuel will become a key global energy source in the coming decades.
Chevron’s move into the Marcellus follows acquisitions by Exxon Mobil and Royal Dutch Shell earlier this year, and joint venture deals there by Total, BP and Statoil.
With the deal, which must be approved by Atlas shareholders, Chevron would gain access to 9 trillion cubic feet of natural gas in the Marcellus and other shale fields owned by Atlas in the eastern US.
“(Chevron) doesn’t have much of a US presence in shale, and I think it’s an important place to be,” Phil Weiss, an analyst with Argus Research, said. “The price looks reasonable.”
Chevron, the second-largest US oil and gas company, will pay $43.34 per share, or a 37 per cent premium to Atlas’ closing price on Monday. That offer consists of $38.25 per share in cash for each Atlas share, plus a distribution of units in Atlas Pipeline Holdings worth about $5.09 per share.
Chevron will also assume net debt from Atlas of about $1.1bn, for a total deal value of $4.3bn. .
San Ramon, California-based Chevron recently bought into shale fields in Poland, Romania and Canada, and the move gives it the opportunity to exploit the dense rock formations that have changed the US energy outlook in recent years.
City A.M. Reporter