Over past 4 years, EQT acquired 230,000 core Marcellus acres and developed 44,000 acres
EQT Corporation says it signed definitive agreements to acquire additional core Marcellus acreage, consisting of 42,600 net acres and current natural gas production of approximately 42 MMcfe per day from Trans Energy, Inc. and entities affiliated with Republic Energy, according to a press release.
An aggregate purchase price of $513 million; and 17,000 net acres and current natural gas production of approximately 2 MMcfe per day from a third-party for $170 million. The transactions are expected to close by year-end 2016. EQT will finance the acquisitions with cash-on-hand.
Combined, these acquisitions add a sizeable amount of acreage to EQT’s core development area and complement EQT’s operations in West Virginia and Pennsylvania.
Much of this acreage is contiguous with EQT’s existing acreage; therefore, lateral lengths can now be extended from 2,750 feet to 6,000 feet, on average, for roughly 190 existing EQT locations – delivering operational synergies that will reduce overall costs and deliver stronger well economics.
Trans Energy and Republic Energy
The 42,600 net acre acquisition in West Virginia includes approximately 250 undeveloped locations that are expected to have an average lateral length of 5,700 feet.
Also included are drilling rights on an estimated 29,000 deep Utica acres. The acreage has an 85 per cent net revenue interest and 89 per cent is either held by production or has lease expiration terms that extend beyond 2018.
The transaction includes 42 Marcellus wells, 33 of which are currently producing 42 MMcfe per day – four that are completed and not turned-in-line; and five that are drilled but not completed.
The 17,000 net Marcellus acreage acquisition in Pennsylvania includes approximately 97 undeveloped locations that are expected to have an average lateral length of 4,600 feet.
Also included are drilling rights on an estimated 10,300 deep Utica acres. The acreage has an 85 per cent net revenue interest and 96 per cent is either held by production or has lease expiration terms that extend beyond 2018.
The transaction includes two Marcellus wells that are currently producing 2 MMcfe per day.
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As part of EQT’s consolidation strategy, during 2016 EQT has increased its core Marcellus position by 143,000 acres, or 55 per cent, for a total of 400,000 acres, including the recent acquisitions.
In summary, over the past four years, EQT has acquired 230,000 core Marcellus acres and has developed 44,000 acres, resulting in a net increase of 186,000 acres. EQT now has 3,680 undeveloped core Marcellus well locations.