It will sell its Haynesville acreage in Louisiana to Vine Oil & Gas and the investment firm Blackstone for $1.2 billion.
Shell and other major oil and gas explorers regularly sell rights to fields where production is flat or declining. They then use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth. The Pinedale and Haynesville formations produce dry gas, which is less profitable than oil or so-called natural gas liquids, at relatively moderate rates.
The Marcellus shale in Pennsylvania has proven to be an extraordinarily prolific dry gas producer, and profitable for drillers because it produces gas at high rates per well. The Energy Department says the formation will produce an average of 15.9 billion cubic feet of gas per day in September, nearly a quarter of total U.S. production.
Ohio's Utica shale is also proving to be prolific, and it includes a higher proportion of more profitable liquid hydrocarbons. Utica gas production is expected to rise to 1.3 billion cubic feet per day in September, up nearly eightfold from 155 million cubic feet per day at the start of 2012, according to the Energy Department.
"We continue to restructure and focus our North America shale oil and gas portfolio," said Marvin Odum, president of Royal Dutch Shell's U.S. division, Shell Oil Company. "We are adding highly attractive exploration acreage, where we have impressive well results in the Utica, and divesting our more mature, Pinedale and Haynesville dry gas positions."