28 May, 2010

Shell to buy East Resources for $5 bn: WSJ

Royal Dutch Shell is expected to announce a deal to buy natural gas explorer East Resources Inc for nearly $5 billion Friday, highlighting heightened interest in North American shale-gas production, the Wall Street Journal reported

Pennsylvania-based East Resources holds more than 650,000 acres in the Marcellus shale -- a rock formation running from West Virginia to New York and said to have vast amounts of natural gas.

The acquisition was expected to include two other natural gas fields in the region, people familiar with the deal told the WSJ. The sale would provide lavish returns for private equity firm Kohlberg Kravis Roberts & Co, which invested $350 million in East Resources for a substantial stake only 11 months ago, the WSJ said.