The Associated Press
NEW YORK —
Chevron will buy natural gas producer Atlas Energy Inc. in a cash-and-stock deal worth $3.2 billion, the companies said Tuesday.Including debt of about $1.1 billion, the deal is worth $4.3 billion in all.
Chevron Corp., based in San Ramon, Calif., is the latest major energy company to make a big acquisition in the natural gas sector, following Exxon Mobil and Royal Dutch Shell. Atlas is a big player in the Marcellus shale of Western Pennsylvania and elsewhere.
Until now, Chevron hasn't made any significant moves to expand into America's vast underground shale deposits. It's waited while other energy companies have rushed to tap shale wells with new drilling technologies that can produce gas cheaper than before.
With natural gas prices continuing to languish, analysts say Chevron is striking at a time when it can get a good price for those assets.
"When the market is weak, that's when it's time to act," Argus Research analyst Phil Weiss said.
Despite enormous supply and weak consumption, natural gas is expected to be in high demand in coming years because it can be found all over the U.S. and produces fewer emissions compared with other fossil fuels.
Atlas, based in Moon Township, Pa., near Pittsburgh, said that its shareholders will receive a package worth $43.34 per share, a 37% premium to the company's closing price on Monday. The package includes $38.25 in cash for each outstanding share along with units of Atlas Pipeline Holdings.
Los Angeles Times
