Sunday, January 8, 2012

BLR: Hand over fist

Christopher Helman, Forbes

10/05/2010 @ 3:14PM |12,342 views

Phil Anschutz Likely Makes Billions On Marcellus Shale Sale

Cropped portion of image from USGS report show...
Map of the Marcellus Shale gas play. Image via Wikipedia
He’s not saying who bought it or for how much, but Denver billionaire Philip Anschutz has sold his 500,000 acres of natural gas fields in the Appalachian basin. This was the extent of the information that his wholly owned Anschutz Exploration Corporation released today:

The assets consist of currently producing oil and gas properties, as well as approximately 500,000 acres in Pennsylvania, Ohio and New York, which have exposure to the Marcellus, Utica and Trenton Black River exploration trends. The sale is expected to close in late 2010. Bank of America Merrill Lynch advised AEC on this transaction.
So how much did these fields likely fetch? In a host of deals this year, land has gone for as high as $14,000 per acre and as little as $5,000 per acre. In May Royal Dutch Shell bought 650,000 acres from East Resources for $4.7 billion. Indian billionaire Mukesh Ambani‘s Reliance Industries did two Marcellus deals this year, buying 63,000 acres for $400 million from Carrizo and 140,000 acres for $1.7 billion from Atlas.
Anschutz, whose net worth we valued at $7 billion in the new Forbes 400 list (see his full 400 profile and photos here), was very early to the Marcellus play so the position likely contains some choice pieces. But because the whole lot is being taken by what appears to be a single buyer, there was probably a volume discount involved. Assuming a low-ball, bargain basement price of $4,000 per acre, the deal would be for $2 billion.
But this is only half the payday that Anschutz has coming. He has also put his oil fields in the Bakken Shale region of North Dakota up for sale. It’s unclear the size of his position there, but oily plays do fetch a hefty premium over natural gas, and development of the Bakken is not being slowed by irrational fears about the dangers of hydraulic fracturing on groundwater.
Do you know who bought Anschutz’s acres? Have an opinion on who could be in the market to buy out Range Resources? Tell us in the comments section.

Spydra's  guess?  The Chinese.

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