EQT Corporation, a leading independent natural gas production company, announced Tuesday that it has entered a definitive purchase and sales agreement with Chevron U.S.A., Inc. under which EQT will acquire Chevron’s upstream and midstream assets in the Appalachian Basin for $735 million.
EQT operations are primarily focused in the cores of the Marcellus and Utica Shales in the Appalachian Basin.
“This acquisition is a natural bolt-on extension of EQT’s dominant position in the core of the southwest Marcellus and supplements our already impressive asset base,” EQT President and CEO Toby Rice said. “With the purchase price underpinned by PDP value, the extensive work-in-progress well inventory, core undeveloped acreage and water assets provide material value upside. Our unique knowledge of these assets, coupled with our superior operating model, puts these assets in the right hands to maximize the embedded value.”
Chevron’s Appalachian assets include a current net production of roughly 450 MMcfe per day of 75 percent gas and 25 percent liquids, as well as approximately 100 work-in-progress wells and approximately 125,000 core new Marcellus acres and 335,000 total net Marcellus acres. EQT will also acquire Chevron’s 31 percent ownership in Laurel Mountain Midstream and two water systems and associated infrastructure in Pennsylvania and West Virginia.
“The digital work environment and business processes that we have created will allow for the seamless integration of these assets into our existing portfolio, while the favorable financial impacts will benefit both equity and debt holders,” Rice said. “This transaction represents another strategic step this team is taking to create value for all stakeholders, while enhancing the durability and sustainability of our business.”
The transaction is expected to close late in the fourth quarter of 2020 with an effective date under the purchase and sale agreement of July 1, 2020.