Noble Energy to sell natural gas assets in Marcellus shale field for $1.23 bn
04 May 2017
US oil and gas producer Noble Energy yesterday struck a deal to sell all its natural gas production assets in the Marcellus shale field for $1.23 billion, in order to focus on more lucrative oil fields.
Noble Energy did not name the buyer, but said that out of the total amount of $1.23 billion, $100 million will be made in three separate payments as contingencies that depend on regional gas prices rising above a certain level over the next three years.
The Houston-based company will use proceeds from the sale to pay down debt, most of which was amassed through its recent acquisition of Clayton Williams Energy for about $2.7 billion.
The assets being sold produce 415 million cubic feet of natural gas equivalent a day and span 385,000 acres in northern West Virginia and Southern Pennsylvania, with proved reserves reaching 1.5 trillion cubic feet.
The unnamed buyer will assume responsibility for up to 430 million cubic feet of natural gas per day of the company's firm transportation, established to support Marcellus upstream production.
''The Marcellus has been a strong performer for Noble Energy over the last few years ……. we have also significantly expanded the inventory of investment opportunities in our liquids-rich, higher-margin onshore assets, which has led us to now divest our Marcellus position. This enables us to further focus our organization on our highest-return areas that will deliver industry-leading U.S. onshore volume and cash flow growth, said, David Stover, Noble Energy's chairman, president and CEO.
The sale is expected to close by the second quarter.
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