British Energy Firm BG Buys 50% of Exco Assets

Purchase price is $950 million

Energy producer BG Group said on May 10 it would buy a 50% share of U.S. Appalachian shale gas activities from its U.S. partner Exco Resources for $950 million.

Shales are sedimentary rocks which are rich in fossil fuels but it is expensive to extract gas from them.

BG Group is acquiring interest in companies that hold Exco's producing and non-producing assets in the Appalachian Basin, located primarily in Pennsylvania and West Virginia,

The London-listed company said it would pay $800 million in cash plus another $150 million towards future drilling costs.

"We are delighted to expand our highly successful alliance with Exco built around complementary skills and objectives," added BG Chief Executive Frank Chapman.

Back in June, BG agreed to pay $1.055 billion to Exco Resources for a 50% stake in a shale gas project based in eastern Texas and northern Louisiana.

Copyright Agence France-Presse, 2010

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