Chevron Corp. on Thursday completed its $4.3 billion acquisition of Pittsburgh-based Atlas Energy Inc., just one day after the Atlas shareholders had approved the deal, the companies said.

“The assets provide Chevron with a solid position in the prolific Marcellus Shale, located in Southwestern Pennsylvania, and complement our global position in developing unconventional gas resources,” said Chevron Vice Chairman George Kirkland.

Atlas Pipeline Holdings LP will now operate under the name Atlas Energy LP and will continue to trade on the New York Stock Exchange under the ticker AHD. Concurrently with the acquisition, AHD acquired natural gas producing assets from Atlas, as well as its syndicated drilling partnership business.

Chevron, which had eschewed domestic shale plays in favor of the deepwater, in November offered to buy shale-savvy Atlas (see NGI, Nov. 15, 2010). Atlas shareholders overwhelmingly approved the deal Wednesday.

Approximately 99.7% of the votes cast at a meeting in Philadelphia were in favor of the merger, which is expected to close promptly, the company said. Upon closing, Atlas shareholders would receive $38.25/share in cash and a pro-rata share of a distribution of more than 41 million common limited partnership units of Atlas Pipeline Holdings LP.

Atlas held close to 486,000 net acres in the Marcellus Shale. It also held an estimated 623,000 acres in the Utica Shale, as well as close to 370,000 acres in Michigan in the Antrim Shale and the Collingwood/Utica play (see NGI, May 10). In addition, Atlas had about 120,000 acres in the Chattanooga Shale of Tennessee and 123,000 acres in the New Albany Shale.

Chevron also gains Atlas’ joint venture (JV) partnership in the Marcellus play that was put together last year with India’s Reliance Industries Ltd. Chevron would assume the role of operator with 60% participation under the original agreement terms (see NGI, April 26; April 12). Reliance continues to fund 75% of the operator’s drilling costs, up to $1.4 billion.

A 49% interest in the Laurel Mountain Midstream LLC, a JV with The Williams Cos., also is part of the transaction. The partners own more than 1,000 miles of intrastate and natural gas gathering lines servicing the Marcellus (see NGI, April 6, 2009).

With the closing of the transaction, Chevron gains an estimated 9 Tcf of gas resources from Atlas, including 850 Bcf of proved reserves and 80 MMcf/d of production.

Chevron recently agreed to pay an extra 10 cents/share to nondirector shareholders of Atlas to settle a lawsuit challenging the takeover. Excluding the 4% of shares held by directors, the additional payment added more than $7 million to Chevron’s $4.3 billion offer. Following Chevron’s offer, several Atlas shareholders sued, alleging that management breached fiduciary responsibilities by not obtaining the best offer. The lawsuits were combined, and a settlement was filed in a memorandum of understanding on Feb. 3, according to a regulatory filing by Atlas.

Reliance protested the merger, saying Chevron was never mentioned when it was negotiating its JV with Atlas, and suggesting it might make a counterproposal (see NGI, Feb. 7).

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.