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Shale's newest investor


The following ran in the Jan. 6, 2012, edition of the San Antonio Express-News. Bruce Bullock, director of the Maguire Energy Center at SMU's Cox School of Business, provided expertise for this story.

January 11, 2012

By Vicki Vaughan

A Japanese corporation has agreed to purchase a 35 percent interest in Dallas-based Hunt Oil Co.'s acreage in the Eagle Ford Shale of South Texas for $1.3 billion.

The investment by Tokyo-based Marubeni Corp. includes the cost to drill “several hundred wells” over a five- to 10-year period in the shale, Marubeni said in a prepared statement.

Marubeni, with a broad line of businesses that includes imports, exports and energy, said its stake in the Eagle Ford Shale covers about 52,000 net acres, and that Marubeni and Hunt have agreed to acquire more acreage in the Eagle Ford Shale.

“We believe that this project, including future expansion and the potential new businesses associated with it, will become a solid base for Marubeni, providing a strong cash flow and profit on a mid- to long-term basis,” the company said in a prepared statement....

Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University's Cox School of Business in Dallas, said that shale plays are a good investment for foreign companies that want to learn as much as they can about shale plays.

“Because shale resources are so abundant around the world, they want to learn as much as they can to make investments in their home countries or in their region of the world.”

Also, U.S. energy companies “have actively sought this foreign capital,” Bullock said. “With natural gas prices depressed as they are, they really need additional capital to drill more prospects.”...

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