Lex: Shell / East Resources

If natural gas is the premier cru of the energy industry, shale rock is its cabernet sauvignon. Now Shell has bought a chunk of it. The Anglo-Dutch oil and gas group is paying $4.7bn for East Resources, giving it 1.05m acres of so-called tight gas acreage in the Marcellus Shale area in the northeastern US. Shell has also paid around $1bn to buy another 250,000 acres in the Eagle Ford shale shelf in Texas. Added to its existing US shale gas assets of some 2.3m acres, the deals expand Shell’s footprint in the sector to 3.6m acres. It is approaching the kind of scale required in what is becoming a very competitive field. Vincent Boland analyses the move.