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BUSINESS NEWS

 
     
 

BG Group completes acquisition of interest in US shale gas alliance

Posted: 14 August 2009

BG Group reported the closing of the upstream and midstream acquisitions as part of the previously announced alliance with EXCO Resources Inc.

After closing adjustments to make the economic effective date of the upstream acquisition and joint development operations 1 January 2009, consideration for the upstream portion of the alliance is US$1 127.0m.

This consists of US$727.0m plus US$400m to be paid as a carry of 75 per cent of EXCO's future costs to develop the Haynesville shale gas.

Following similar closing adjustments, the consideration paid for the midstream portion of the alliance is US$269.2m.

Under the terms of the alliance, BG Group has:

Acquired 50 per cent interest in 120 000 net acres in EXCO's upstream leases in a defined area of East Texas and North Louisiana, which encompasses the Haynesville shale, the prospective Bossier shale and the Cotton Valley tight gas sands formations;

Added 2.6 trillion standard cubic feet (tcf) to BG Group's net potential resources, with current net production of 90 million standard cubic feet per day (mmscfd), anticipated to increase to some 250 mmscfd in 2012, net to BG Group;

Acquired a 50 per cent interest in a newly formed company that will hold related and complementary EXCO gas-gathering and transportation assets and entered into agreements to support the joint development and growth of these assets; and

Entered into a joint development agreement with EXCO to co-operate in the development and production of onshore shale and tight gas resources across 14 counties and parishes in East Texas and North Louisiana.

Both the midstream and upstream transaction were granted regulatory approval by the Federal Trade Commission on 17 July.

 

 
     

 

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