Shell | Appalachia

The acquisition of East Resources, a Pennsylvania-based oil and gas company, on July 29, 2010, is the foundation for Shell’s new operations and growth in the Appalachian Basin. Shell’s current Marcellus Shale operations are focused in Tioga County.

On May 28, 2010, Bloomberg.com reported that Royal Dutch Shell Plc agreed to buy closely held East Resources Inc., for about $5 billion.

East Resources will no longer be a U.S. corporation.

This will be the second-biggest oil and gas deal this year, after BP Plc’s cash acquisition of deepwater assets from Devon Energy Corp. for $7 billion on March 11, according to Bloomberg data.

Private-equity firm Kohlberg Kravis Roberts & Co. invested $350 million in East Resources 11 months ago, according to the Journal.

Exxon Mobil Corp., the biggest U.S. oil company, agreed in December to buy XTO Energy Inc., the country’s largest natural gas producer, for $31 billion to gain control of shale-gas assets. Companies from India’s Reliance Industries Ltd. to Japan’s Mitsui & Co. are spending billions of dollars on drilling to dislodge natural gas from shale -- sedimentary rock composed of mud, quartz and calcite.

East Resources, Inc. is an independent exploration and development company with more than 1.25 million acres of land holdings. East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming.

On July 2, 2010, ProPublica reported wastewater from a nearby East Resources gas well leaked into a field and came in contact with farm animals resulting in a state-ordered quarantine of 16 cows.

See: A Fracking First in Pennsylvania: Cattle Quarantine

"Tests performed for East Resources Inc., found hazardous chemicals and heavy metals, including chloride, barium and strontium. East did not dispute that a leak had occurred."

Reuters reported that a survey by Pennsylvania Land Trust Association, based on data from state regulators found that East Resources committed the most violations, 138, followed by Chesapeake Appalachia LLC with 118, and the privately held Chief Oil & Gas Corp. with 109.