Following in the footsteps of rival Exxon Mobil Corp. while commodity prices are low, San Ramon, Calif., oil and gas giant Chevron Corp. said Tuesday it has agreed to buy a U.S. unconventional natural gas explorer, Atlas Energy Inc. of Moon Township, Pa., for $4.3 billion.

The price includes $38.25 per share in cash, or $3.2 billion, a 20.5% premium over Atlas’ closing price Monday, and $1.1 billion in debt assumption. Atlas shareholders will also receive 41 million units of Atlas Pipeline Holdings after restructuring transactions before the deal closes. Based on Monday’s closing price, the units will be valued at $5.09 per Atlas share. So the combined premium for the company and the units will be 36.6%.

The restructuring transactions include Atlas acquiring 49% of Laurel Mountain Midstream LLC from Atlas Pipeline Partners LP for $403 million and selling all interests in existing investment partnerships, 175 billion cubic feet of proved natural gas reserves and other energy assets to Atlas Pipeline for $250 million, including $30 million in cash and $220 million in newly issued units.

Tudor, Pickering, Holt & Co. Securities Inc. wrote in a morning report that major oil companies are continuing their onshore push into the U.S. unconventional natural gas business, including Royal Dutch Shell plc with its $4.7 billion purchase of properties in the Marcellus and South Texas’ Eagle Ford shale basins from Kohlberg Kravis Roberts & Co.‐backed East Resources Inc. and BP plc’s acquisition of properties in the Eagle Ford from Lewis Energy Group for $200 million, both earlier this year. “It’s positive for other gassy E&P’s [exploration and production companies] as chasing likely begins,” the firm wrote. “There are buyers of assets if the stock market won’t.”

Other Marcellus players, and possible targets, include Cabot Oil & Gas Corp., Range Resources Corp. and Ultra Petroleum Corp. But companies involved in other shale regions, including Petrohawk Energy Corp., QEP Resources Inc. and Southwestern Energy Co., are “cheap too,” Tudor Pickering noted.

Some analysts wouldn’t be surprised to see another bidder come in, as Chevron is getting the properties for about $9,000 an acre, versus the $14,000 Reliance Industries Ltd. paid as part of a joint venture agreement.

The deal gives Chevron a big stake in Appalachia and the prolific Marcellus Shale, which stretches from West Virginia to New York state, as well as other shale plays in Michigan. It follows ExxonMobil’s $41 billion purchase last fall of XTO Energy Inc., which also operates in the Marcellus as well as other major shale basins.

The deal also comes at a time of low natural gas prices — about $4 per thousand cubic feet, versus $14 just a few years ago, and is Chevron’s biggest since its $18 billion acquisition of Unocal Corp. in 2005.

“This acquisition is the right opportunity for Chevron,” Chevron vice chairman George Kirkland said in a statement. “We are acquiring a company that has one of the premier acreage positions in the prolific Marcellus. The high quality resource, competitive cost structure in the Marcellus, strong growth potential of the asset base and its proximity to premier natural gas markets make this targeted acquisition a compelling investment for Chevron.” Kirkland added that Atlas’ assets further advance its global shale gas position and complement its recent entrance into shale gas opportunities in Poland, Romania and Canada.

Gary Luquette, president of Chevron North America exploration and production, said in a statement that Atlas brings the company a highly skilled team with strong operating experience and established land management capabilities, which has been difficult to find in the industry.

“This knowledge, together with Chevron’s technical expertise and global experience with large scale project developments, will create strong organizational synergies,” he said.

Atlas CEO Edward Cohen said in a statement that shareholders will benefit from the transaction, as Atlas will have achieved a return of well over 800% since its initial public offering less than six‐and‐a‐half years ago.

“All of our employees and shareholders should know that, through Chevron’s acquisition of Atlas Energy, we will be bringing into the Marcellus Shale one of the world’s largest corporations, an energy company second to none in its skills and dedication to excellence,” he said. “This augurs well for customers and suppliers, our joint venture partners, those of our employees who will be continuing with Chevron, the local communities in which we have been active — and our nation, for all of whom Chevron’s involvement in development of this resource will be of enormous benefit.”

Atlas’ properties contain 9 trillion cubic feet of natural gas resource, including 850 billion cubic feet of proved natural gas reserves with 80 million cubic feet of daily natural gas production.

The assets in the Appalachian basin consist of 486,000 net acres of Marcellus Shale, 623,000 net acres of Utica Shale and 49% of Laurel Mountain Midstream, a joint venture that owns 1,000 miles of intrastate and natural gas‐gathering lines servicing the Marcellus.

Atlas’ Michigan properties include Antrim Shale producing assets and 100,000 net acres of Collingwood/Utica Shale. The deal must clear Atlas restructuring transactions, Atlas shareholders and regulators.

Atlas has been looking for capital to further explore its holdings in the region and make acquisitions. Reliance, controlled by Indian billionaire Mukesh Ambani, bought 40% of Atlas’ Marcellus Shale operations as part of the joint venture agreement in April for $1.7 billion, and later in the month, the two bought 42,344 acres in the area from unnamed parties for $191.9 million.

Chevron said it will assume Atlas’ role as operator with 60% of the joint venture under the original agreement terms between Atlas and Reliance. Reliance will continue to fund 75% of the operator’s drilling costs up to $1.4 billion.

Global Hunter Securities LLC wrote in a report that the Reliance joint venture was apparently not an impediment to the transaction. “Reliance has an $8,000 per acre preferential right on acreage sales outside of their AMI [area of mutual interest] with Atlas, it is unlikely (but unclear) that the pref [preferential] right would be applicable in this corporate transaction,” it wrote.

Chevron may have to deal with some sticky issues with the acquisition, as Atlas has been sued by landowners in Pennsylvania, claiming that its drilling there is polluting soil and drinking water.

In a separate statement, Atlas Pipeline Partners said the Laurel Mountain sale to Atlas Energy should immediately add to earnings and allow it to boost its quarterly distribution to unitholders to $1.80 to $2.00 per unit annually, versus $1.40 previously. It also said the deal will strongly position the partnership for future strategic growth with substantial liquidity and give it the lowest net leverage in the industry.

“The sale of Laurel Mountain at nearly 40‐times trailing cash flow is a tremendous opportunity to bring significant value forward while dramatically reducing capital requirements over the next several years,” CEO Eugene Dubay said in a statement.

Goldman, Sachs & Co.’s Cynthia Walker, Ray Strong, Michael Carr and Rusty Kelley and Skadden, Arps, Slate, Meagher & Flom LLP’s Charles Mulaney, L. Byron Vance, Joseph Yaffe, Neal Stoll and Ian John are advising Chevron. Jefferies & Co.’s Ralph Eads, Deutsche Bank Securities Inc.’s Dan Ward, Gregory Sommer and John Hanna and Wachtell Lipton Rosen Katz’s David Lam, Mark Gordon, Adam Emmerich, Joshua Holmes, Michael Segal, Joshua Feltman and Jonathan Moses are assisting Atlas.

Berenson & Co.’s George Ward, John Rice, Dave Saxena, Steve Robbins and Adam Epstein advised Atlas Pipeline Partners on the Laurel Mountain sale. Stifel Nicolaus & Co.’s Chris Shebby and Friedman Kaplan Seiler & Adelman LLP’s Gerald Adler advised the special committee of the board of Atlas Pipeline Partners’ general partner Atlas Pipeline Partners GP LLC. Jones Day was special legal adviser to the partnership, including Jeff Schlegel, Chris Hewitt, Michael Solecki, Gary Short, Todd Wallace, Rachel Rawson and Scott Fletcher. Citi’s Claudio Sauer and Covington & Burling LLP’s Stephen Infante, Scott Smith, David Rosinus, Robert Newman, Corinne Goldstein and Robert Heller advised the special committee of Atlas Holdings’ board.