Ascent Resources along with its subsidiaries will acquire certain natural gas and oil assets in the Utica shale play in the Appalachian Basin from Hess, CNX Resources, Utica Minerals Development, and an undisclosed fourth seller for a total price of around $1.5bn.

Utica Shale - Ohio

Image: Hess and CNX Resources to sell 39,000 net acres in Utica shale play for $400m to Ascent Resources. Photo: courtesy of Hess Corporation.

Through the multiple transactions, Ascent Resources will add nearly 113,400 net leasehold acres, and royalty interests on around 69,400 fee mineral acres, spread across the three hydrocarbon windows in the over-pressured core of the Utica Shale.

Hess and CNX Resources have agreed to sell their joint venture interests in the shale play in eastern Ohio, comprising about 39,000 net acres including 26,000 net undeveloped acres, for a sum of about $400m.

According to Ascent Resources, the overall acquisitions complement its existing assets and support extended lateral lengths while improving its capital efficiency further and also its exposure to liquids.

Ascent chairman and CEO Jeff Fisher said: “The properties are largely contiguous with the Company’s existing acreage and will allow us to further improve capital efficiency by drilling longer laterals, capturing cost and marketing synergies, and adding premium, near-term drilling locations with a high net revenue interest.

“Additionally, the Acquisition solidifies the Company’s position as a low-cost producer, expands our operating margins and maintains our current expectations to achieve positive free cash flow in 2019.”

The acquisition involves 93 operated wells and net production close to 216MMcfe/d, out of which 19% are liquids. It will also include over 380 gross incremental horizontal well locations and an increased working interest in over 900 gross horizontal well locations, said Ascent Resources.

The proved reserves and total resources of the assets involved in the acquisition are about 1.1 Tcfe and 5.6 Tcfe, respectively, with scope for further upside through development optimization, said the company.

Ascent Resources expects the completion of all the acquisitions by the end of the third quarter of this year, provided they meet the customary closing conditions.