World leader, Royal Dutch Shell PLC, announced that it has agreed to buy U.S. Gas firm East Resources Inc., for $4.7 Billion from private investors. East Resources Inc., is one of the major owner of Shale Gas Holdings in the United States. Shell further announced that it will pay cash for acquiring the firm which has the capability of producing 10,000 barrels of oil daily.
At one end when Shell has revealed plans of acquiring the U.S. Gas Firm, analysts believe that Shell would be further burdened as the company is already planning substantial spending. After working out of the deal, Shell’s daily gas production in North America would rose by 7.5 percent.
Shale Gas has been tagged as one of the strongest deliverer of Oil in future. Currently it has gas accounts between 15 to 20 percent of the total U.S. gas production but expecting to quadruple in the coming years.
Another source told that the company was not commenting on how it intended to finance the purchase. The current balance sheet shows $8.45 Billion cash and equivalents at March 31. An analysts revealed that if the company plans to move the same way, not much dividend would be declared in the next two years.
The deal awaits customary regulatory approvals, after which the sale would be confirmed.
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