Beaver County Blue

Progressive Democrats of America – PA 12th CD Chapter

Where Is Plan B? How About Manufacturing for Clean and Green Renewables if the ‘Cracker’ Fails? Or Even if It Doesn’t?

Posted by carldavidson on August 16, 2014

Site of proposed Shell ‘cracker’ plant across from Beaver and Vanport

Shell Acquires Pennsylvania Shale Gas Rights as Part of a $2.1B Deal

By Alex Nixon
Tribune Review

Aug. 14, 2014 – Royal Dutch Shell is shuffling its portfolio of natural gas holdings to increase attention on the Marcellus and Utica shale formations in northern Pennsylvania.

The energy giant 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.

“We continue to restructure and focus our North America shale oil and gas portfolio,” Marvin Odum, Shell’s Upstream Americas Director, said in a written statement. “We are adding highly attractive exploration acreage, where we have impressive well results in the Utica, and divesting our more mature, Pinedale and Haynesville dry gas positions.”

In one of the two deals announced on Thursday, Shell said it will sell its Pinedale acreage in Wyoming to Houston-based Ultra Petroleum for $925 million plus the land in Potter and Tioga counties. Shell and Ultra have been partners in a joint venture in northern Pennsylvania. Shell will acquire 100 percent of the joint venture.

In the second deal, Shell will sell its gas assets in northern Louisiana, known as Haynesville, to Dallas-based Vine Oil & Gas LP for $1.2 billion.

Shell and other major oil and gas explorers regularly sell rights to fields where production is flat or declining. They then use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth. The Pinedale and Haynesville formations produce dry gas, which is less profitable than oil or so-called natural gas liquids, at relatively moderate rates.

“It’s a good sign that they’re still committed to the Marcellus,” Brinker said.

In the deal with Rex, Shell is selling 208,000 acres in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties, and Columbiana and Mahoning counties in Ohio — an area where Rex has drilling operations.

Brinker said the sale of land in Western Pennsylvania shouldn’t affect whether Shell eventually builds a petrochemical plant in Beaver County.

The company is active in the Marcellus, which, Brinker said, “doesn’t assure that the petrochemical facility will go ahead, but it’s a good sign.”

Shell has an option to buy an industrial site in Center and Potter from zinc producer Horsehead Holdings.

Singleton said Shell’s land dealings are independent of its chemical operations.

“Neither the potential divestiture of the Slippery Rock acreage or the acquisition of additional acreage in Pennsylvania impacts Shell’s ongoing evaluation of the proposed Beaver County petrochemical plant, which is still in the assessment stage,” she said.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com. The Associated Press contributed.

Read more: http://triblive.com/business/headlines/6615616-74/shell-gas-pennsylvania#ixzz3AZWQh9Dq
Follow us: @triblive on Twitter | triblive on Facebook

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2 Responses to “Where Is Plan B? How About Manufacturing for Clean and Green Renewables if the ‘Cracker’ Fails? Or Even if It Doesn’t?”

  1. […] Source: Where Is Plan B? How About Manufacturing for Clean and Green Renewables if the ‘Cracker’… […]

  2. Bob S. said

    The EPA has come down on PaDEP for all of the lead in the air for Potter, Center , and Van port. This is the zone for toxic waste to be sky dumped. Tearing down the plant has kicked up the dust.

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