Purchase adds 53,400 Marcellus, 44,100 Utica acres
EQT Corporation (ticker: EQT) announced a $527 million acquisition in the Marcellus today, the latest in a series of acquisitions made by the company. In the transaction EQT will acquire 53,400 core Marcellus acres, drilling rights on 44,100 net Utica acres, and current natural gas production of approximately 80 MMcfe/d. Included are 174 Marcellus wells, 51 of which are in progress and 123 are developed. Also included are 20 miles of pipeline and 32,000 non-core acres.
The acreage will be purchased from Stone Energy as part of the latter’s bankruptcy proceedings. The transaction is pending bankruptcy court approval, with closing expected on February 27. 86% of the acreage is held by production or has lease expiration terms that extend beyond 2019.
EQT paid around $5,000/acre for this property, less than the ~$10,000/acre seen in the company’s previous Marcellus purchase. In the Permian, by contrast, acreage valuations regularly rise above $40,000/acre.
EQT beat out several other companies bidding on the acreage including Tug Hill, whose $360 million offer was the first bid for the properties. EQT’s nearest rival was American Petroleum Partners, which bid $526 million. Similar to previous acquisitions, EQT will finance this purchase with cash on hand.
EQT acquisition one of many in the last year
EQT has made several acquisitions in the last year to boost its acreage in the Marcellus and Utica. In May the company purchased 62,500 Marcellus acres and drilling rights on 53,000 Utica acres from Statoil for $407 million. 60,000 Marcellus acres were purchased from Trans Energy in October, for a purchase price of $683 million. EQT acquired a further 14,000 acres in the Marcellus last week for $130 million.
The oil and gas industry has seen a flurry of acquisitions recently, primarily centered on the Permian. Parsley Energy (ticker: PE) bought 71,000 Permian acres for $2.8 billion yesterday, adding to the $607-million purchase it made last year. Noble Energy (ticker: NBL) purchased Clayton Williams Energy in January, paying $3.2 billion. ExxonMobil (ticker: XOM) made the largest recent Permian deal, buying 275,000 acres from the Bass family for $6.6 billion.
