Repsol buys Rockdale and launches an offensive in the gas sector in the US

Repsol is preparing an offensive to consolidate itself as one of the great players in the natural gas sector in the United States. The company that directed by Josu Jon Imaz has just closed the purchase of Rockdale Marcellus, which allows it to strengthen its production capacity in the country.

Repsol will disburse $ 222 million – around 200 million euros – to take over this company that was born from the properties that Shell had in Tioga, Lycoming and Bradford counties in Pennsylvania in 2017.

Rockdale Marcellus owns and operates producing wells on a total of 42,897 net acres, has a current production of 110 million cubic feet per day (mmcfpd) of gas and has more than 100 potential future drilling locations identified in this dry gas shale formation.

The Spanish oil company has also made this acquisition at a more than attractive price. Repsol participated in an auction held on December 16 to take over the company after Rockdale went to the so-called Chapter 11 (bankruptcy) last September.

Judge Gregory L. Taddoni, who has led the process, ratified the purchase on December 29 and the assets have passed into the hands of Repsol this same January 1.

Repsol thus reinforces its presence in the gas business at a time of maximum price boiling. The company has ensured that “we consider natural gas as the solution more efficient to promote a structured transition towards a low emissions future. “For this reason, and in line with its strategic plan, the Spanish oil company also reached another agreement on August 9 to acquire the remaining 25% of the capital of the Canaport regasification plant -now Saint John LNG- and already controls 100% of the plant after sixteen years of alliance with Irving Oil.

LNG purchase

With both operations, Repsol takes a strategic leap in the area that will be definitively consolidated with the mega-agreement signed in 2018 to buy 20 million tons of LNG from Venture Global over 20 years and that is valued at 4,000 million euros. Venture Global’s intention is to begin supplying the Spanish company at the end of this year or early 2023 through its new Calcasieu Pass LNG facilities. This gas will be used as a priority to supply the combined cycles that Repsol has in Spain, but it may also be sold anywhere in the world.

Repsol’s operation is also its first purchase of exploration assets since it closed in November 2019 the acquisition for 325 million of dollars from his partner Equinor’s 63% stake in Eagle Ford, a productive asset located in Texas. In this way, Repsol controlled 100% of the assets and became the operator. The agreement allowed the Spanish company to improve the management of its portfolio and take advantage of operating synergies with the incorporation of approximately 280 net square kilometers and 34,000 barrels equivalent per day of production. Thus, Repsol’s total production at Eagle Ford after the agreement amounts to approximately 54,000 barrels of oil equivalent per day.

In short, Repsol has upstream assets in the United States in the Marcellus Shale in Pennsylvania – one of the largest unconventional natural gas fields in the world, in the Eagle Ford Shale in South Texas, in the Gulf of Mexico and in the North Slope. in Alaska, where they announced the discovery of Horseshoe in 2017, the largest hydrocarbon discovery conventional on US soil in 30 years.

Venture Global closed a 4,000 million contract to supply LNG to the Spanish company

Repsol is reviewing a large part of its hydrocarbon exploration and production portfolio to move towards a more flexible model with a less geographic presence. The oil company in turn has for sale together with its partner, the Australian Oil Search, el 29% de Pikka, the largest oil discovery in the United States of the last 30 years.

Both companies want to incorporate a partner to face the investment of 3,000 million dollars (2,500 million euros) that will mean the start-up of this giant in Alaska.

Repsol’s strategic change has led to the departure of countries such as Morocco, Iraq, Australia, Vietnam and Ireland and has recently closed the sale of its assets in Ecuador and part of those it operates in Russia. During the years gone by, the company has also left other areas in which he considered that there was no development such as Namibia, Angola, Liberia, Bulgaria, Papua New Guinea or Sierra Leone. The oil company intends to stay in only 14 countries.