Shell spends $70 BILLION on to buy BG Group

In a massive merger, Shell buys BG Group for $70 billion.  BG is  London based utility.

http://www.cnbc.com/id/102568626

The big question for most of us is how will this affect the proposed Monaca cracker plant? Do they have the cash to build it now?  I did hear yesterday that Shell applied for the required EPA emissions permits so they are still progressing on the plant.

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Permalink Reply by Jim Litwinowicz on April 8, 2015 at 1:54am

Some added info;

The acquisition will add 25% to Shell's proven oil and gas reserves and 20% to production, and improve the company's prospects in new projects, particularly in Australia LNG and Brazil deep water.

http://seekingalpha.com/news/search?query=shell+bg+group&ifp=0

Shell is paying a 52% premium which seems like a huge number to me. But with the very strong dollar and weak Euro, that means buying Europe is cheaper. 

Will this kick off a buying/merger binge in the industry? Will it boot the stocks of other E & Ps in anticipation?

Permalink Reply by Paul Martinelli on April 8, 2015 at 3:44am

M&A activity will pick up......lots of headroom with Oil/NG so low.....so

Shell isn't paying too much.

I Speculate CHK  will be bought.

Permalink Reply by cattlerancher on April 8, 2015 at 4:29am

Shell actually applied for the PA DEP emissions permits in May 2014.  The DEP announced about two weeks ago that the emissions at the proposed plant do not exceed the DEP's benchmarks.  The DEP also had an independent study on the matter and they came to the same conclusion.  The DEP and Shell are having a public forum for Q &A on May 5, 2015.  I suspect that the permit will be issued within 45 days of the public forum. 

Permalink Reply by Todd on April 8, 2015 at 10:17am

That cracker doesn't seem like it costs as much now after that acquisition.  It must have taken Shell 50 years to make the decision to make that investment based on the price tag. :-)

Permalink Reply by Elnathan Cory on April 8, 2015 at 2:35pm

This is all good!

Permalink Reply by Trapper on April 9, 2015 at 8:21am
Our boom time is coming! I just hope I am still young enough when it gets here! Lol
Permalink Reply by Trapper on April 8, 2015 at 3:53pm
A year per billion seems about right! Lol
Permalink Reply by Todd on April 9, 2015 at 4:17am

Trapper,

You're right.  The decision must have been in the making for Seventy Years! :-)

 

Permalink Reply by Jim Litwinowicz on April 9, 2015 at 6:22am

c rancher;  thanks for the correction.  I heard a report on radio the other day about emissions permits but didn't hear full report.  My bad.

Permalink Reply by Tim Tarr on April 8, 2015 at 6:03pm

Look at the LNG side of BG. Just could be Shell will use that expertise to expand LNG exports in/from US big time. Throw in  crackers for ethane and perhaps a Nat. gas to diesel/gasoline/oil plant, Shell has experience with that in Qatar. We're talking huge profits over the long term.

Permalink Reply by paleface on April 9, 2015 at 1:13am
Permalink Reply by Jim Litwinowicz on April 9, 2015 at 6:20am

Hey paleface; that article says that BG is producing gas in both the Haynesville and Marcellus shales.  Any idea under what name?  I haven't of heard BG before

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