A major gas driller in the Marcellus Shale region has raised $150 million that it plans to spend developing wells throughout the Appalachian formation.
Energy Corp. of America raised the money by selling secured notes to CPPIB Credit Investments Inc., a subsidiary of a Canadian-based pension plan with a $4.6 billion portfolio.
As part of the arrangement, CPPIB will acquire a royalty stake in all of the wells drilled using the $150 million, and will receive a royalty check from the gas they produce.
Energy Corp. didn't disclose how large a royalty stake that will be, or how much interest is being paid on the sum. The Denver-based company holds significant acreage in the Marcellus region, with area drilling concentrated in Greene County.
Companies elsewhere have increasingly turned to foreign investors to help pay for the costs of drilling wells, which can average about $6 million apiece. Chesapeake Energy formed a joint venture with French oil firm Total S.A. in March to develop wells in Ohio's Utica Shale.businessnews - marcellusshale
Erich Schwartzel: firstname.lastname@example.org or 412-263-1455. First Published May 25, 2012 12:00 AM