EQT has signed an agreement to acquire assets in the Marcellus Shale formation in West Virginia, US, from Norwegian oil and gas producer Statoil for $407m in cash.
The transaction is scheduled to be completed by 8 July 2016.
Under the terms of the deal, EQT will acquire 62,500 net acres, which have an estimated resource potential of 9.2 trillion cubic feet (Tcf), and current natural gas production of 50 millions of cubic feet equivalent (MMcfe) per day.
With production of about 9,300 barrels of oil equivalent a day, the assets include 31 Marcellus wells, out of which 24 are producing wells, three are completed but not started production, and the remaining four drilled wells are not fully completed.
About 87% of the acreage is either held by production or has lease expiration terms that extend beyond 2018.
EQT expects the assets located in Wetzel, Tyler, and Harrison Counties of West to complement its adjacent operations in Wetzel County, West Virginia.
Additionally, the acquisition is expected to boost EQT’s core undeveloped Marcellus acreage by 29%.
As part of the deal, EQT will also acquire drilling rights on an estimated 53,000 net acres that are undeveloped and prospective for the deep Utica.
EQT noted that the 62,500 acre includes existing Marcellus production and approximately 500 undeveloped locations with expected average lateral length of 5,600ft.
Statoil said it will retain its operated properties in Ohio and non-operated Marcellus positions.
Image: The acquisition is expected to strengthen EQT’s core undeveloped Marcellus acreage by 29%. Photo: courtesy of Statoil.