The US shale oil and gas market is heating up. While many big oil companies including Chevron Corporation (NYSE:CVX) are predicting flat growth in the next 4-5 years, the modest increases just reflect individual cases rather than the industry outlook. ExxonMobil has charted ambitious capital investment plans ranging from US$25 billion to US$300 billion every year till 2014.

Continuing with the shale gas developments in the US, Pennsylvania based Consol Energy (NYSE:CNX) has announced to acquire more than 9,000 wells from Dominion Resources Inc (NYSE:D). The acquisition, which involves 1.46 million acres of acreage, is likely to make Consol Energy the third largest player in the Marcellus Shale area. Consol Energy has agreed to pay US$3.48 billion for the assets.

To say that the deal is a game changer for Consol Energy will be just stating the obvious here. Consol Energy, though a big energy company, is best known as a coal producer in Appalachia region of the eastern United States. The all cash deal in all probability will change the way the company is known.

However, the real icing on the cake is the prospects of making it big in shale gas. Consol is setting itself up as a major player in the eastern United States, as the additional acreage from Dominion along with its own operations will propel Consol among the top three players in the Marcellus Shale region. The company will be trailing only Chesapeake Energy and Range Resources.

With the sale of the business, Dominion Resources has completed the exit from the upstream business. The company will focus its energies purely on its gas distribution and electricity businesses on the East Coast and in the Midwest.

The shares of Consol Energy are trading marginally down after dropping close to 10 percent yesterday. However, analysts are giving thumbs up to Dominion for the deal. Dominion's CEO, Thomas Farrell maintained that the transaction is accretive to earnings per share and reduces the company’s commodity sensitivity by over 20 percent. The sale also means that the company need not issue new shares to finance its growth program through 2011. Dominion stock has appreciated more than 5 percent this month with decent volumes.