EQT Corp to buy Marcellus Shale Assets

Integrated energy company EQT Corp said it will buy about 58,000 net acres in the Marcellus shale from a group of private operators and landowners for about $280 million in cash and stock. The company said 90 percent of the deal would be funded with its stock and the remaining 10 percent in cash.

Following the closing, EQT said it will hold more than 500,000 net acres in the high-pressure Marcellus shale fairway.

EQT is part of a growing list of oil and gas companies looking to boost their acreage in the Marcellus Shale that spans across parts of Pennsylvania, West Virginia and New York, and is said to hold enough natural gas to satisfy U.S. demand for a decade, according to some geologists.

“Approximately 88 percent of the acquired acreage will be held in fee or by production from existing vertical wells and the remainder of the acreage will be subject to leases with a weighted average 10-year term,” Chief Executive Murry Gerber said in a statement.

EQT raised its average estimated ultimate recovery per well to between 4 and 4.5 billion cubic feet of natural gas equivalent (Bcfe) from a range of 3.5 to 4 Bcfe.

“At an average cost of $3 million per well, EQT’s development cost is estimated to be less than $0.75 per thousand cubic feet,” Gerber said.

Source: Reuters

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Posted by admin on March 3rd, 2010. Filed under Marcellus Shale, Shale Basins. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry