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China Coal Company Affiliate Buys Into Marcellus Shale Venture

A private Denver-based company active for decades in the Appalachian Basin has entered a 50/50 joint venture to develop 25 horizontal wells in the Marcellus Shale play with a new player affiliated with China Shenhua Energy Co. -- the world's largest coal distributor and China's largest coal producer.

Energy Corporation of America, which owns and operates 4,600 wells on its 1 million acres of leasehold and 5,000 miles of pipeline in the Rocky Mountains, along the Gulf Coast and in Appalachia, announced the venture with Shenhua America Holdings Corp. recently.

"We have an outstanding track record in [in the Marcellus], an excellent reputation, respect from local community members and leaders and extensive experience working in the Marcellus," said Energy Corporation CEO John Mork. "We are experts in shale gas development. We are very pleased to be working with Shenhua on this joint venture and this is only the beginning of what, I hope, will be a long, mutually beneficial working relationship."

Mork said Shenhua will contribute the first $90 million toward drilling the 25 wells in Greene County, located in Southwest Pennsylvania, where results from multiple operators have looked promising and drilling activity is increasing (see Shale Daily, Dec. 12). Any remaining expenditures will be split evenly between the two companies, Mork added. 

The move is just the latest in recent years of a string of state-owned Chinese energy companies buying into basins across the country and scooping up related assets across North America.

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