Anadarko Petroleum Corp on Monday signed a $1.55 billion deal with state-owned Korea National Oil (KNOC) for one-third of the U.S. company's interest in the Eagle Ford shale in South Texas.
The long-anticipated deal was welcomed by investors, who pushed shares of Houston-based Anadarko up 2.5 percent.
Analysts pegged the value of the deal at about $13,000 to $16,000 per acre, representing some of the highest prices so far paid for acreage in that basin. The Eagle Ford is valued because it contains crude oil and natural gas that is rich in liquids that can be stripped out and sold at premium.
Foreign companies, encouraged by high crude oil prices and hungry for the exploration know-how, have been on the hunt for deals in shale formations across the United States.
And U.S. companies, looking for cash to fund exploration budgets, have been eager partners.
For example, Chesapeake Energy inked a $1.3 billion deal with China's top offshore oil producer CNOOC Ltd <0883.HK> for its oil-rich shale deposits in northeast Colorado and Southeast Wyoming.
Anadarko will not receive any cash up front, instead KNOC will pay for all of Anadarko's 2011 capital costs in the basin. After that, KNOC will pay 90 percent of Anadarko's costs until the funds are spent, projected to happen at year-end 2013.
KNOC will receive about 80,000 net acres in the Eagle Ford as well as 16,000 additional dry-gas acres in the Pearsall Shale, also located in South Texas.
Shares of Newfield Exploration , a U.S. oil and gas company that holds acreage near Anadarko's, climbed nearly 4 percent on news of the deal.
The deal, subject to regulatory approvals, is expected to close in the second quarter and will be effective January 1 this year.
Anadarko said its advisers to the deal were Jefferies & Co Inc and Deutsche Bank Securities.
Shares of Anadarko rose $1.92, or 2.5 percent, to $79.19 in late morning trading on the NYSE.
(Additional reporting by Thyagaraju Adinarayan in Bangalore; Editing by Sriraj Kalluvila, Dave Zimmerman)