OIL and gas producer Noble Energy will pay $3.4bn (£2.06bn) to Consol Energy to form a partnership to develop Consol’s assets in the Marcellus shale.
The move is S&P 500-listed Noble’s first into the Marcellus shale deposit in the eastern US, one of the largest natural gas fields ever discovered, and comes amid a natural gas price slump.
Under the agreement announced yesterday, Noble will pay $1.07bn for a 50 per cent stake in coal and gas producer Consol’s 663,350 undeveloped acres and fund $2.13bn of Consol’s drilling costs over eight years.
That spending will be capped at $400m per year, and drops off when wholesale gas prices fall.
Oil giants Exxon Mobil and Chevron Corp have both entered the Marcellus shale in the past two years, spending billions to get a share of the field that some analysts reckon could hold a century’s worth of gas for the United States.