British energy giant Royal Dutch Shell announced last Friday that it had agreed to pay $4.7 billion (€3.8 billion) in cash for most assets owned by US natural gas explorer East Resources.
Shell said in a statement that it had agreed to acquire subsidiaries which own substantial amounts of East Resources' business.
"Shell has agreed to acquire subsidiaries which own substantially all of the business of East Resources for a cash consideration of $4.7 billion, from East Resources, and its private equity investor Kohlberg Kravis Roberts and Co. and its advisors Jefferies and Company.
"The transaction is subject to certain regulatory approvals," Shell added.
East Resources is a privately-owned business with its primary activity focused on the Marcellus shale rocks in the north-eastern US.
Technology to extract natural gas from shale, or sedimentary rock, has improved dramatically in recent years, leading companies into regions where resources were thought to be spent, such as New York State.
The methods use hydraulic fracturing to break up deep underground rock, jetting high-pressure liquid containing chemical products deep into the ground, releasing the gas and bringing it to the surface.
Shell chief executive officer Peter Voser said that the purchase was an opportunity to enhance the Anglo-Dutch group's growth through exploration and focused acquisitions, and through divestment of non-core operations.
"East Resources' management have built an excellent organisation, with high quality assets in the Marcellus, which we are pleased to have as our centrepiece as we enter the premier shale gas play in the northeast US," he added.
Shell's share price rose 0.89 per cent at 1,759.5 pence in reaction to the takeover announcement on London's benchmark FTSE 100 index, which was up 0.40 per cent in late deals.
"This deal is further evidence of the robust market in the US for proven shale plays," said David Hart, energy market analyst at broker Westhouse Securities.
Shell said East Resources produces 10,000 barrels oil equivalent per day, predominantly in natural gas, and has "substantial medium-term growth potential."
In 2000, shale gas represented only one percent of US output. Today it accounts for 20 per cent and could surpass 50 per cent by 2030, according to a recent study by research firm IHS CERA.