EQT to Acquire Chevron’s Appalachian Basin Assets for $735 Million
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US-based natural gas producer EQT has agreed to acquire Chevron’s upstream and midstream assets in Appalachian Basin for $735 million.
Under the definitive purchase and sale agreement signed by both the companies, EQT will acquire around 100 work-in-progress wells as well as 31 percent stake in Laurel Mountain Midstream.
The deal will also include nearly 125,000 core net Marcellus acres, 335,000 total net Marcellus acres, two water systems as well as the associated infrastructure in Pennsylvania and West Virginia in the US.
EQT President and CEO Toby Rice said: “This acquisition is a natural bolt-on extension of EQT’s dominant position in the core of the southwest Marcellus and supplements our already impressive asset base.
“With the purchase price underpinned by PDP value, the extensive work-in-progress well inventory, core undeveloped acreage and water assets provide material value upside.
“Our unique knowledge of these assets, coupled with our superior operating model, puts these assets in the right hands to maximize the embedded value.”
The assets included in the transaction have a net production of approximately 450 million cubic feet per day (MMcfe) that include 75 percent gas and 25 percent liquids.
Subject to customary closing conditions, the acquisition is estimated to be concluded in late in the fourth quarter of the year.
EQT is planning to fund the transaction, depending on the market conditions and other factors, using cash on hand, drawings under its revolving credit facility and/or one or more capital markets transactions.
Rice added: “The digital work environment and business processes that we have created will allow for the seamless integration of these assets into our existing portfolio, while the favorable financial impacts will benefit both equity and debt holders.
“This transaction represents another strategic step this team is taking to create value for all stakeholders, while enhancing the durability and sustainability of our business.”
For the deal, Jefferies has served as financial advisor to EQT.
In May this year, EQT completed the sale of non-strategic assets that are located in Pennsylvania and West Virginia to Diversified Gas and Oil for $125 million.
Source: NS Energy
To stop by EQT’s website, CLICK HERE
To stop by Chevron’s website, CLICK HERE
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