Noble’s Marcellus divestments add up to $2 billion; buyer is Quantum Energy Partners
Noble Energy (ticker: NBL) will sell its 50% interest in Cone Gathering and 33.5% ownership in Cone Midstream Partners (ticker: CNNX) to Quantum Energy Partners for a total of $765 million in cash. The transaction is expected to close in Q3 2017. Quantum Energy has also been revealed as the buyer of Noble’s 1.5 Tcfe of upstream Marcellus assets, announced earlier in May.
Originally publically offered in late 2014, CONE Midstream was formed by Noble and CONSOL Energy (ticker: CNX) to serve as a midstream company for the two founders. CONE has extensive processing systems in Southwest Pennsylvania and West Virginia, where it handles production from its founders. CONE reports that it operates about 250 miles of pipeline with installed compression of more than 91,000 horsepower.
CONE describes its Pennsylvania and Northern West Virginia properties as its “anchor systems.” The company has five major operations in the area, with 185 miles of gathering pipe and 1,130 MMcf/d of compression capacity.
Source: Cone Midstream
CONE has additional growth opportunities in its central West Virginia properties. At present the company only has a small amount of capacity installed, but significant expansions are planned.
Source: Cone Midstream
Noble refocusing midstream efforts on DJ, Delaware basins
Noble Chairman and CEO David Stover commented on the sale, saying “CNNX has performed exceptionally well since its IPO in late 2014, exceeding forecasts despite a challenging macro-economic backdrop.
”Including this transaction, Noble Energy will realize more than $1 billion in total value from our Marcellus midstream business, which represents approximately three times our net invested capital.
“Going forward, our midstream efforts are focused on Noble Midstream Partners, supporting our DJ Basin and Delaware Basin growth areas.”
Noble has now received nearly $2 billion in cash in its two Marcellus sales to Quantum Energy. Noble reports that these funds will be used to pay off the cash costs of the $2.7 billion Clayton Williams acquisition, reduce debt to strengthen the balance sheet and to support onshore development.
