Royal Dutch Shell sells drilling rights
Royal Dutch Shell announced on Thursday that it is selling drilling rights to mature gas producing areas in Wyoming and Louisiana in separate deals in exchange for $2.1 billion in cash and 155,000 acres in Potter and Tioga counties, where it operates gas wells.
The announcement followed a deal on Tuesday in which Shell said it was selling 208,000 acres in Western Pennsylvania and eastern Ohio to Rex Energy for $120 million.
“They already know what they have” in Potter and Tioga counties, said Lyle Brinker, director of equity research at IHS Energy in Norwalk, Conn. “It’s an area where they already know what they’re getting into.”
Shell spokeswoman Destin Singleton said the seemingly contradictory moves in Pennsylvania are part of the company’s regular review of its mix of energy production assets to improve value for its shareholders. Shell is working to focus its onshore drilling program on a few of the more prolific formations in an effort to boost profitability. The company wrote down the value of its shale acreage in the United States by $2.1 billion last year amid lower natural gas prices.
Radiant Oil & Gas Acquires Additional Acreage in Southern Louisiana
Radiant Oil & Gas, Inc. (OTC: ROGI), an independent oil and gas exploration and production company focused on the onshore and shallow state waters of the U.S. Gulf Coast area, announced today it has acquired the Garnet project, a 1,000 acre field in St. Mary Parish, La. originally discovered and developed by Sun Oil Co. Based on management estimates, the project adds over $45 million to the Company’s PV-10 reserves. A third-party analysis of the project is currently underway to confirm management’s initial analysis.
“This acquisition is consistent with our strategy of purchasing and redeveloping long lived, historically producing assets in the Gulf Coast,” said Radiant CEO John Jurasin. “As interest in unconventional shale plays has surged, we continue to see a number of overlooked opportunities to acquire quality, mature projects in conventional areas at compelling valuations. Garnet in particular offers a unique opportunity. Because the field has been extensively studied, and we have experienced crews in the region, we are confident that we can quickly get this project commercially producing and generating cash flows.”
Radiant outbid four other parties in a competitive lease sale to acquire the project. Garnet is one of a series of fields from the original discovery, which contains approximately 500 wells. Since 1965, it is estimated that those wells have produced over 59 million barrels of oil and 2.8 trillion cubic feet of gas. Radiant has already identified 21 areas where it can re-work abandoned wells or drill new wells.
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