WPX Energy (WPX) announced today it signed an agreement to sell its operations in northeast Pennsylvania and release certain firm transportation capacity to Southwestern Energy Company (SWN) for approximately $300 million cash.
“The transformation of our company continues as we execute our strategy,” said Rick Muncrief, WPX president and chief executive officer.
“We’re heading into 2015 reshaped, refocused and ready to grow margins, develop our highest returning assets and build the long-term value of the company,” Muncrief added.
WPX’s first transaction involving its Marcellus Shale operations marks the company’s sixth significant agreement it has entered into since May to narrow the company’s business focus, increase scalability of core assets, bring value forward and further strengthen its balance sheet. As previously announced, WPX also recently executed a new five-year, $1.5 billion senior unsecured credit facility.
The sale to Southwestern Energy Company includes physical operations covering approximately 46,700 net acres, roughly 50 million cubic feet per day of net natural gas production and 63 operated horizontal wells. The assets are primarily located in Susquehanna County, Pa.
The transaction also includes the release of firm transportation capacity WPX has under contract in the northeast, primarily 260 million cubic feet per day with Millennium Pipeline. Upon the transfer of the firm capacity, WPX will be released from approximately $24 million per year in annual demand obligations associated with the transport.
WPX and Southwestern expect to close the transaction during the first quarter of 2015 subject to regulatory approval and typical closing conditions.
WPX’s remaining operations in the Marcellus Shale primarily consists of its physical operations in Westmoreland County in southwestern Pennsylvania and additional firm transport capacity on Transco’s Northeast Supply Link line. These assets also are targeted for divestiture.
UPCOMING CONFERENCE PRESENTATION
WPX CEO Rick Muncrief is scheduled to speak at the Capital One Securities annual energy conference on Thursday, Dec. 11, at approximately 10:20 a.m. Eastern. Please visit www.wpxenergy.com on the day of the event to confirm the time, see the slides and listen to the presentation.
About WPX Energy, Inc.
WPX Energy develops and operates oil and gas producing properties in North Dakota, New Mexico and Colorado. The company has a long history of innovation and stakeholder engagement, recognized through more than 40 local, state, federal and industry awards.