Shell’s recent sale has analysts considering a trend
Friday, May 8, 2020
Royal Dutch Shell’s announcement to sell its Appalachia shale gas assets may not have caught much attention if it weren’t for the fact it paid nearly nine times the new sale price when it purchased the assets a decade ago, according to Yahoo Finance.
Shell has agreed to sell around 350 producing Marcellus and Utica wells in Tioga County and associated facilities to National Fuel Gas Company for $541 million. However, the company paid $4.7 billion when it purchased the company in 2010.
The decision is in line with two major trends among international oil majors. One is to focus on core operations and ditch underperforming assets in recent years. The other is a more recent rush of oil majors trying to dump their assets in the Marcellus and Utica shale plays during persistently low natural gas prices
Learn more: Yahoo Finance > Oil majors are abandoning this key shale basin
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.