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Chevron in $4.3 billion deal for shale firm

By Aaron Smith, staff writer

NEW YORK (CNNMoney.com) -- Chevron Corp., aiming to expand its holdings in the Marcellus Shale natural gas region of Pennsylvania, said Tuesday it will acquire Atlas Energy Inc. for $4.3 billion.

The deal includes a cash purchase of $3.2 billion and the acquisition of $1.1 billion worth of Atlas' debt, said Chevron.

Chevron vice chairman George Kirkland said the acquisition will provide his company with a foothold in the Marcellus region.

"We are acquiring a company that has one of the premier acreage positions in the prolific Marcellus," said Kirkland, in a press release.

Atlas' shares are being valued at $43.34 per share, said Chevron, a 37% premium from its Monday closing price.

"All of our shareholders should benefit from this sale and upon its completion, Atlas will have achieved a return of well over 800% since its initial public offering less than 6-1/2 years ago," said Edward Cohen, chief executive of Atlas Energy, in a press release.

Chevron's (CVX, Fortune 500) share price slipped slightly in pre-market trading. Atlas' (ATLS) share price soared by more than one-third.

Companies specializing in natural gas production rose in pre-market trading, on speculation that the Chevon-Atlas merger means good news for the sector.

Range Resources (RRC) rose more than 5% about one hour before the opening bell. Cabot Oil & Gas (COG) and Southwestern Energy (SWN) were both up more than 4%.Chesapeak Energy Corp. (CHK, Fortune 500) gained about 2%. To top of page

Index Last Change % Change
Dow 17,813.39 1.20 0.01%
Nasdaq 5,116.14 13.33 0.26%
S&P 500 2,088.87 -0.27 -0.01%
Treasuries 2.23 -0.01 -0.49%
Data as of 8:15pm ET
Company Price Change % Change
Pfizer Inc 32.87 0.90 2.82%
HP Inc 12.64 -2.00 -13.66%
General Electric Co 30.36 -0.30 -0.98%
Bank of America Corp... 17.44 -0.03 -0.17%
Freeport-McMoRan Inc... 8.10 -0.20 -2.41%
Data as of 4:02pm ET


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