UK super major BP Plc. (BP) intends to make a deal with privately held Lewis Energy Group for the expansion of its U.S. shale-gas operations, as per news published in upstreamonline.com. The transaction value of this deal is expected to be worth $150 million to $200 million.

BP will acquire a 50% stake in 80,000 acres of the Eagle Ford Shale play in the southeastern part of Texas held by Lewis Energy. BP will shell out $4,000 to $4,500 per acre.

Major energy companies are showing significant interest towards the Eagle Ford Shale play, which is currently treated as a rapidly developing oil and gas field. While ConocoPhillips (COP) holds properties in this play, Chesapeake Energy Corp. (CHK) is looking to expand its position as well.

With an uptrend in the economic conditions, many large integrated energy companies have been keen to acquire smaller independent U.S. producers or their properties. BP’s move is the latest in a series of deals that have brought major oil companies into U.S. shale gas.

While the ExxonMobil (XOM) ? XTO Energy (XTO) deal is a recent prominent example, Total’s (TOT) acquisition of a quarter of Chesapeake’s Barnett Shale operations in Texas is also significant in this space.

BP has been establishing a strong position in the U.S. shale gas and applying advanced technology for getting more out of the wells it is drilling. However, we are concerned about the North American natural gas outlook and don’t think a modest increase in the gas price is going to do much to tighten up the supply position in the North American gas market.

Zacks Investment Research

1. (SNP) Sinopec and BP plc Are In Talks For Shale GasSinopec (SNP), the Chinese oil giant, is in talks over a possible collaboration with BP...
2. (CHK) Chesapeake Energy Corporation Forms Joint Venture with Total S.A.Chesapeake Energy Corporation (CHK) has joined hands with the world’s fifth largest integrated oil and...
3. (UPL) Ultra Petroleum Corporation Adds Properties to Marcellus Shale RegionNatural gas producer Ultra Petroleum Corporation (UPL) has agreed to buy additional properties in the...
4. (CVX) Chevron Wins Poland Shale Exploration LicenseChevron Corp. (CVX) – the second-biggest U.S. oil company – gained an exploration license in...
5. (CNP) CenterPoint Energy & FPL Group Ink Pipeline DealA subsidiary of CenterPoint Energy Inc. (CNP) and NextEra US Gas Assets LLC, an affiliate...
6. (MWE) MarkWest Energy Partners’ Unit Signs Gas DealsMarkWest Liberty Midstream & Resources – a majority-owned joint venture of MarkWest Energy Partners L.P....

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