Chevron Corporation has announced an agreement to acquire Atlas Energy for $4.3 billion, to provide it with a natural gas resource in southwestern Pennsylvania's Marcellus Shale.
Chevron will pay $3.2 billion in cash and assume Atlas Energy’s outstanding debt of approximately $1.1 billion. The acquisition is subject to certain Atlas Energy restructuring transactions, approval by Atlas Energy shareholders and regulatory clearance. Atlas shareholders will receive a package worth $43.34 per share - a 37 percent premium to Monday's closing price.
"This acquisition is the right opportunity for Chevron," said George L. Kirkland, Chevron vice chairman. "We are acquiring a company that has one of the premier acreage positions in the prolific Marcellus. The high quality resource, competitive cost structure in the Marcellus, strong growth potential of the asset base and its proximity to premier natural gas markets make this targeted acquisition a compelling investment for Chevron.
"The Atlas Energy assets further advance Chevron's global shale gas position, complementing the company's recent entrance into shale gas opportunities in Poland, Romania and Canada,” he added.
When the transaction closes, Chevron will gain Atlas Energy's estimated nine trillion cubic feet of natural gas resource, which includes approximately 850 billion cubic feet of proved natural gas reserves with approximately 80 million cubic feet of daily natural gas production.
Edward E. Cohen, chairman and CEO of Atlas Energy, was also upbeat about the deal, noting in a press release that shareholders will have enjoyed an 800 percent return on their investment since the company was first floated on the stock exchange six and a half years ago.
