Chevron Corporation and Atlas Energy announced Tuesday that Chevron would acquire Atlas Energy for cash of US$3.2 billion. The acquisition will provide Chevron with an attractive natural gas resource position primarily located in southwestern Pennsylvania’s Marcellus Shale.
Once the transaction is completed, Chevron will gain Atlas Energy’s estimated nine trillion cubic feet of natural gas resource, which includes approximately 850 billion cubic feet of proved natural gas reserves with approximately 80 million cubic feet of daily natural gas production.
“This acquisition is the right opportunity for Chevron,” said George Kirkland, Chevron vice chairman. “We are acquiring a company that has one of the premier acreage positions in the prolific Marcellus. The high quality resource, competitive cost structure in the Marcellus, strong growth potential of the asset base and its proximity to premier natural gas markets make this targeted acquisition a compelling investment for Chevron.”
Kirkland also commented: “The Atlas Energy assets further advance Chevron’s global shale gas position, complementing the company’s recent entrance into shale gas opportunities in Poland, Romania and Canada.”
Gary Luquette, Chevron North America Exploration and Production president said, “Atlas Energy brings to us a highly skilled team with strong operating experience and established land management capabilities. This knowledge, together with Chevron’s technical expertise and global experience with large scale project developments, will create strong organisational synergies.”
With this latest acquisition, Chevron becomes a 60% operator of a joint venture with India’s Reliance Industries of the Marcellus deposit. Reliance will continue to fund 75% of the operator’s drilling costs, up to $1.4 billion prior to Chevron’s acquisition of Atlas.
