A merger between Range Resources and Memorial Development Resources will enable the company to expand its operations further than the Marcellus Shale. Range Resources paid $3.3 billion to acquire the corporation, which will give the company a foothold in the Gulf Coast. The transaction itself was estimated to be valued at a total of $4.4 billion, but it had to be adjusted to compensate for over $1 billion in debt that Memorial Development Resources had accrued.
The Natural Gas Market Is Swiftly Growing
The acquisition of Memorial Development Resources set the company’s price point at $15.75 a share and represents a significant investment by Range Resources in the production of natural gas. Though natural gas has been lower in price within the past few years, it has also been pillsarena.com in exceptionally high demand. As the world reduces its reliance on coal, other fuel sources such as crude oil and natural gas become highly desirable. Range Resources will now be able to position itself to take advantage of natural gas exports to Mexico, in addition to other exports that may occur in international trade in the future. Natural gas is becoming a plentiful enough resource that the United States has now begun distributing it to other countries. Range Resources is presently already one of the largest gas producers within the Marcellus shale.
Range Resources Continues to Expand
The Memorial Development Resources merger is the third such that Range Resources has initiated throughout this year, making it obvious that the company is intending to aggressively expand. Though Range Resources temporarily experienced a reduction in its per share costs, the company believes that diversifying its asset portfolio is a valuable next step. The Gulf and the Marcellus Shale are both highly productive assets that will undoubtedly play a large role in the future of oil and gas. In addition to the merger, Range Resources also intends to sell other assets of its business for a total of $77 million, though it is unknown as to which company these assets are being sold to. These property assets consist of over 9,000 acres of assets throughout the state of Oklahoma.
The Range Resources and Memorial Development Resources acquisition shows a company that is intending to aggressively expand, both within its home of Marcellus Shale and throughout the Gulf. Range Resources has made multiple high profile acquisitions this year alone and is continuing to grow, showing that the oil and gas industry is now able to position itself domestically for the future. Though the oil and gas industry may be experiencing lower than average prices by now, it’s expected that these prices will go up significantly by the end of 2016. Companies that are able to grow and innovate, such as Range Resources, will be able to take advantage of the market recovery.
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