The firm has completed the sale of non-strategic assets that are located in Pennsylvania and West Virginia for $125m

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EQT closes sale of certain non-strategic assets and strategic volume curtailment. (Credit: Pixabay/Anita starzycka)

Pennsylvania-based natural gas producer EQT has closed the transaction to sell certain non-strategic assets and implemented a strategic volume curtailment programme.

Subject to customary closing adjustments, the firm has completed the sale of non-strategic assets that are located in Pennsylvania and West Virginia to Diversified Gas and Oil PLC for $125m.

The natural gas producer said that the transaction consists of potential contingent consideration of an additional $20m, which is payable based on certain future commodity price targets.

EQT president and CEO Toby Rice said: “The closing of this non-strategic asset sale demonstrates our commitment to improving the balance sheet and reducing debt.

“These assets sit outside our core focus area and the divestment will enable a heightened focus on our core asset portfolio.

“Additionally, the transaction relieves EQT of the higher relative operating costs and substantial asset retirement obligations associated with these assets and will improve our financial standing.”

The transaction includes 80 Marcellus wells located in Cameron, Clarion, Clearfield, Elk, Indiana, Jefferson, and Tioga Counties in Pennsylvania, with current net production of about 50MMcfe per day.

It also includes 809 Conventional wells in Doddridge, Harrison, Marion, Monongalia, Ritchie, Taylor, Tyler, and Wetzel Counties located in West Virginia with a net production of about 3MMcfe per day.

EQT temporarily limits the gross production of about 1.4 Bcfe per day

Additionally, EQT has made a decision to temporarily limit the gross production of about 1.4Bcfe per day, which is equal to about 1.0Bcfe per day of net production.

The curtailment period will be subject to commodity price movements, relationships and resulting economics, and could potentially continue through the end of the second quarter 2020.

In 2018, Diversified Gas and Oil finalised a $575m agreement to acquire certain gas and oil assets in the Appalachian Basin, US, from EQT.