BG Group To Buy Exco Shale Assets for $950 Million

British gas producer BG Group said it would pay $950 million to buy a 50 percent interest in shale gas assets in Appalachia from EXCO Resources, the latest in a string of shale gas deals between the companies.

BG said it was paying $800 million cash and $150 million towards EXCO’s drilling share of drilling costs for a half-share in the assets, which produced 35 million standard cubic feet per day of natural gas.

Production of gas from shale reservoirs, which are tight and display low permeability, has exploded in recent years.

Although this has weighed on gas prices, companies including BG hope strong future energy demand, especially for fuels which emit less CO2 than coal or oil will ensure good profit margins in the future.

In April BG and Dallas-based EXCO agreed to jointly acquire privately held Common Resources LLC for about $446 million.

In June 2009, BG said it would pay Exco $1.3 billion for an interest in shale gas resources in the Haynesville shale gas area.

In August, the companies agreed to a $249 million deal to develop and operate EXCO’s midstream assets in East Texas and North Louisiana.

SOURCE:
Reuters: “BG Group To Buy Exco Shale Assets For $950 Mln”

Short URL: http://naturalgasforamerica.com/?p=727

Posted by admin on May 12th, 2010. Filed under Haynesville Shale, Shale Basins. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry