Shell to divest natural gas assets in $541M deal

[Tom Kirkman + 8,860]

You can frequently bypass paywalls by using Private tabs in your web browser.  My preferred browser on my laptop is Brave, and there is a built in option of opening a new private window with Tor, and that frequently does the trick of bypassing paywalls. 

Firefox has similar options.  I avoid Chrome unless absolutely necessary.

My preferred browser on my phone is DuckDuckGo.  No desktop version yet of the DuckDuckGo web browser, only for mobile so far.  Note the difference between DuckDuckGo search engine and DuckDuckGo mobile web browser.  I recommend both, and both are freely downloadable.

Anyway, back to the Shell Natural Gas article ...  it was behind a paywall, so full article copied below.

Shell to divest natural gas assets in $541M deal

The Netherlands-based Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B), which has its U.S. headquarters in Houston, has reached a $541 million deal to divest its Appalachian natural gas holdings.

Williamsville, New York-based National Fuel Co. (NYSE: NFG), which owns natural gas driller Seneca Resources Corp., will acquire about 330 producing wells and 450,000 Marcellus and Utica wells in Tioga County and other parts of northern and western Pennsylvania. The deal, which was announced late on Monday, May 4, is expected to close in July 2020.

National Fuel can either pay in cash or up to $150 million of the purchase price in common stock at a $38.97 share value; National Fuel closed May 4 at $38.93 a share. Shell would also get up to $15 million each in two contingent payments if National Fuel didn't pay in cash.

Although Shell will be divesting its natural gas assets in Pennsylvania, it will remain active in the commonwealth with the petrochemical plant being built in Beaver County. It's only divesting natural gas in favor of oil.

"Divesting our Appalachia position is consistent with our desire to focus our shales portfolio," Shell Upstream Director Wael Sawan said in a statement.

Acquiring Shell's Pennsylvania assets allows National Fuel to grow within its existing Tioga County assets, which are contiguous to Shell's and National Fuel's Empire Pipeline. The deal will add somewhere north of 200 million cubic feet of natural gas production daily.

"National Fuel's acquisition of these high-quality assets in one of the most prolific areas in Appalachia will provide the company with a unique and highly strategic opportunity to further its integrated development approach in the region," said National Fuel President and CEO David P. Bauer.

Seneca Resources is the No. 8 biggest driller in Pennsylvania, according to Pittsburgh Business Times research. Shell is No. 11. Combining the two would vault Seneca into the top five.

In March, Shell slashed at its spending plans for 2020 by $5 billion, bringing it to no more than $20 billion. The company also plans to cut its operating costs by $3 billion to $4 billion per year over the next 12 months compared to 2019 and decided not to move into the next phase of its share buyback program once the current $1 billion tranche is complete. As part of its plans to cut spending, Shell dropped out of a proposed liquefied natural gas export project.

Earlier in March — before the coronavirus pandemic and OPEC+ oil price wars hit the industry — Shell also said it was looking to sell refineries in Mobile, Alabama, and in the Puget Sound area near Anacortes, Washington.

Shell Oil Co. is based in Houston and is one of the largest energy employers in the area. The company was No. 3 on the Houston Business Journal's 2019 Largest Houston-Area Energy Employers List, which published in October, based on its roughly 11,500 local, full-time employees.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are serving as financial advisers to National Fuel. Kirkland & Ellis LLP and Jones Day are acting as National Fuel's legal advisers. Shell's press release did not list its advisers.