Statoil Takes Another Big Bet in Shale Gas

Norwegian government controlled Statoil ASA has announced a further expansion of its shale gas operations in the United States, creating a joint venture with Canada's Talisman Energy of Canada to acquire acreage the Eagle Ford shale formation in south-west Texas, for $1.3 billion from Denver-based Enduring Resources.

Statoil and Talisman have formed a 50-50 joint venture to buy 97,000 acres of Eagle Ford assets from Enduring.

In addition, Statoil will acquire half of Talisman’s existing 37,000 acres of Eagle Ford properties, leaving the Norwegian group with total net control over 67,000 acres.

“The magnitude of the shale resources in North America and the significant role these resources are expected to play in the future energy mix make this an attractive opportunity,” said John Knight, head of Statoil’s unconventional energy business.

In 2008 Statoil bought a stake in the Marcellus shale gas acreage in the US north-east from Chesapeake Energy Corporation.

The Eagle Ford shale is seen as an especially attractive prospect as it is believed to be rich in natural gas liquids and condensates, which command higher prices than regular natural gas.

Talisman is shifting its focus toward unconventional natural gas plays in Canada and the United States, with an interest in the emerging shale play in Poland.

Talisman, in partnership with San Leon Energy plc., plans to drill its first three wells in Poland in mid-2011.