Repsol has bought shale oil and gas assets from US firm Rockdale Marcellus for $222 (200 million euros). This company was born out of holdings which Shell had in the counties of Tioga, Lycoming and Bradford in Pennyslvania in 2017. Repsol already operates a shale field near there.
The Spanish oil and gas giant participated in an auction to acquire Rockdale on December 16, following the latter’s adherence to Chapter 11 in September.
Rockdale owns and operates productive wells in a net total of 42.897 acres, with a current daily output of 110 million cubic feet of gas. There are over 100 possible future perforations already identified in this formation of dry shale gas.
Renta 4 opinion: This operation is a good one from a strategic and geographical location point of view, as it strengthens Repsol’s presence in the area. The purchase will definitely consolidate the mega agreement signed in 2018 to acquire 20 million tonnes of LNG from Venture Global over a 20-year period, valued at 4 billion euros.
In addition, the transaction is the first purchase of exploration assets Repsol has made since it closed in November 2019 the $325 million buy of its partner Equinor’s 63% in Eagle Ford, an asset in production in Texas.
A relatively minor operation, equivalent to 1.2% of its market capitalisation. The media flags it is an attractive acquisition for Repsol, although it does not justify it. Neutral. We reiterate our Overweight recommendation with a TP of 13.30 euros/share.