News Column

Reports: Blackstone Nears Deal To Buy Shell's Haynesville Stake For $1.2 Bln

August 10, 2014

THE HAGUE (dpa-AFX) - Private equity firm Blackstone Group L.P. (BX) is nearing a deal to buy European oil giant Royal Dutch Shell's (RDS-B, RDSB.L, RDSA.L, RDS-A) 50 percent stake in a shale-gas field in Louisiana for about $1.2 billion, according to media reports on Sunday.

Shell owns a 50 percent stake in a joint venture that owns more than 350,000 acres within the Haynesville Shale formation, a gas-filled rock formation in northern Louisiana and east Texas. Shell entered the region after it struck a deal to explore the field in 2007 in partnership with Encana Corp.(ECA, ECA.TO).

Oil companies have been selling assets in the U.S. that they acquired when natural gas prices were higher, in order to focus on more profitable areas. On the other hand, private equity firms are buying these assets so as to improve their operations or in order to combine them with other nearby assets.

Shell said in January 2014 that it will increase the pace of its asset sales, which are likely to be $15 billion for 2014-2015 combined in upstream and downstream.

Shell noted at that time that that the landscape it had expected had changed, and factors such as the worsening security situation in Nigeria in 2013 and delays to non-operated projects in several other countries, have altered the outlook.

In 2012, Blackstone invested $2 billion in Cheniere Energy Partners LP (CQP), which is building a plant in Louisiana to export liquified natural gas from the continental U.S.

BX closed Friday's regular trading at $32.98, up $0.35 or 1.07 percent on a volume of 2.53 million shares.

RDS-A closed Friday's trading at $80.38, down $0.09 or 0.11 percent on a volume of 1.90 million shares.

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Source: dpa-AFX International Compact

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