EQT to acquire Statoil-operated Marcellus acreage for $407 million

EQT Corp., Pittsburgh, has agreed to acquire 62,500 net acres and current production of 50 MMcfd of natural gas equivalent in the Marcellus shale from Statoil USA Onshore Properties Inc. for $407 million. The deal is expected to close on or about July 8.

Primarily in Wetzel, Tyler, and Harrison Counties, W.Va., the acquired acreage is within EQT’s core development area and complements EQT’s adjacent operations in Wetzel County, the firm says.

The deal includes 500 undeveloped locations that are expected to have an average lateral length of 5,600 ft. Because much of the acquired acreage is contiguous with EQT’s existing development area, the lateral length of 106 existing EQT locations can now be extended from 3,000 to 6,500 ft.

In line with the EQT’s consolidation strategy, the deal increases EQT’s core undeveloped Marcellus acreage by 29%. The acquisition also includes drilling rights on an estimated 53,000 net acres that are undeveloped and prospective for the deep Utica.

The acquired assets include 31 Marcellus wells, 24 of which are producing. Of the seven others, three are complete and not online, and four are drilled but not complete.

The resource potential of the acreage is estimated at 9.2 tcf, and 87% of the acreage is either held by production or has lease expiration terms that extend beyond 2018. The acreage has 84% net revenue interest.

Statoil entered US shale in 2008 by forming a Marcellus joint venture with Chesapeake Energy Corp. In 2012, Statoil expanded its Marcellus footprint in deals with Grenadier Energy Partners LLC, PetroEdge Energy LLC, and Protege Energy LLC (OGJ Online, Dec. 19, 2012).

In late 2014, Statoil divested 30,000 net Marcellus acres with natural gas production of 29 MMcfed in West Virginia and southwest Pennsylvania to Southwestern Energy Co. for $394 million (OGJ Online, Dec. 23, 2014).