EQT, CHK in $113M Marcellus Deal - Analyst Blog
06 Maggio 2013 - 5:10PM
Zacks
Integrated energy player
EQT Corporation (EQT) has inked a definitive
agreement worth $113 million with Chesapeake Energy
Corporation (CHK) and its partners for Marcellus acreage
and ten wells in Pennsylvania. The transaction is likely to close
on May 30, 2013.
The acquisition comprises of about 67,000 net acres in Marcellus
and 32,000 net acres in dry Utica play. The total acreage of 99,000
in southwestern Pennsylvania is to cost $60 million while the
remaining $53 million is for the 10 Marcellus wells in Washington
County.
Of the total acreage in Marcellus, around 25,000 acres, which lies
in the core Marcellus development areas of Washington, Greene, and
Allegheny counties, will be developed through multi-well pad
drilling and extended laterals. The remaining 42,000 Marcellus
acres are likely to face hindrances in developments at present due
lease expirations in the near-term or a scattered footprint.
Of EQT’s purchase of 10 Marcellus wells, only 3 are producing
currently. The remaining 7 are estimated to add about 1.0 billion
cubic feet equivalent (Bcfe) to the company’s sales volume, once it
comes online by end of 2013. These existing wells represent
approximately 54.0 Bcfe of proved developed reserves in total and
possess an average lateral length of 4,200 feet.
On the completion of the transaction, EQT proposes to drill around
4 wells on the new acreage towards the end of 2013. These drilling
activities are not expected to have a major impact on the company’s
2013 capital budget or the sales volume guidance, which was
recently, raised to 340 — 350 Bcfe.
EQT holds a Zacks Rank #2 (short term Buy rating). However, there
are other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas
industry like Newpark Resources Inc. (NR) , and
EPL Oil & Gas, Inc. (EPL) that appear more
attractive in the short term.
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
EQT CORP (EQT): Free Stock Analysis Report
NEWPARK RESOUR (NR): Free Stock Analysis Report
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