Royal Dutch Shell said it would pay $4.7 billion cash to buy privately held East Resources Inc, giving it substantially more exposure to natural gas plays in North America.
East controls 650,000 net acres (2,600 square kilometers) in the so-called Marcellus Shale, and 1.05 million net acres overall. Production is currently 10,000 barrels of oil equivalent per day, mostly in natural gas.
These acreage additions form part of an on-going strategy, which also includes divestments, with an objective to grow and to upgrade the quality of Shell's North America tight gas portfolio, Shell chief executive Peter Voser said. The acquisition came hours after the U.S. government said it would review Shell's plans to begin drilling exploratory wells off Alaska this summer.
Shell said closing the deal was subject to customary regulatory approvals. Besides its majority owners, East counts private equity firm Kohlberg Kravis Roberts & Co. as an investor.
(Reporting by Ben Berkowitz; Editing by Dan Lalor)