BG Group spends $1.3bn on Exco shale gas stake

BG GROUP said yesterday it would pay Dallas-based Exco Resources $1.3bn (£789m) for an interest in shale gas resources, as oil and gas firms continue to snap up assets before an economic recovery drives prices higher.

The companies said that each would own 50 per cent of a venture to which Exco is contributing 120,000 acres of land in the Haynesville shale gas area in Texas and Louisiana, plus associated gas infrastructure.

The deal – the latest in a flurry of mergers and acquisitions in the sector in the past month – represents the gas producer’s entry into the shale gas business, until recently one of the hottest targets for US oil and gas investment.

Production of gas from shale formations, a more complex operation than producing from simple gas reservoirs, has jumped in recent years due to US gas prices soaring on the back of record crude prices.