By Alex Nixon
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.