BG, Exco Resources to develop shale gas

BG Group PLC agreed to pay $1 billion to Exco Resources Inc., Dallas, for 50% interest in 120,000 acres in East Texas and north Louisiana.

By OGJ editors
HOUSTON, July 2
-- BG Group PLC agreed to pay $1 billion to Exco Resources Inc., Dallas, for 50% interest in 120,000 acres in East Texas and north Louisiana.

Most of the property involves the Haynesville shale play.
BG and Exco plan to jointly develop and produce the acreage. Exco will be the operator.

The acquisition adds 2.6 tcf to BG’s resources with current net production of 78 MMscfd. Production is anticipated to increase to 250 MMscfd net to BG in 2012.

BG Chief Executive Officer Frank Chapman said, “The transaction increases BG Group's exposure to long-term unconventional gas resources and skills.”

In addition, BG agreed to negotiate to acquire a 50% interest in Exco gas-gathering and transportation assets for $249 million.

The upstream acquisition and the joint development agreement are conditional on BG’s midstream acquisition and also upon regulatory approvals.

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