SWEPI completes sale of Appalachia shale-gas property

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SWEPI LP, a subsidiary of Royal Dutch Shell plc, recently completed the $541 million sale of property in the Appalachia shale-gas position to Seneca Resources Co. and NFG Midstream Covington, subsidiaries of National Fuel Gas Co.

The sale includes approximately 450,000 acres in Pennsylvania, including 350 producing Marcellus and Utica wells in Tioga County. The wells produce about 250 million standard cubic feet of gas daily.

The sale also includes facilities and midstream infrastructure.

The all case transaction has an effective date of Jan. 1, 2020, but National Fuel had the option to provide up to $150 million of NFG common stock.

“Divesting our Appalachia position is consistent with our desire to focus our Shales portfolio,” Wael Sawan, Shell upstream director, said. “While we maximize cash in the current environment, our drive for a competitive position in Shales continues. It is a core part of our Upstream portfolio along with the Deep Water and Conventional oil and gas businesses.”

Shell has owned the property for more than a decade. It sold the property as part of divesting noncore assets and a strategy to focus on the development of higher margin, light-tight oil assets.

The sale closed last month.