980 Bcfe of reserves sold in two deals
QEP Resources (ticker: QEP) announced today two agreements to sell natural gas assets in Wyoming for a total of $777.5 million.
Pinedale Energy Partners, an affiliate of Oak Ridge Natural Resources will pay $740 million for all of QEP’s assets in the Pinedale Anticline field in Sublette County. According to QEP’s most recent investor presentation, the company owns 17,400 net acres in the Pinedale Anticline, with 964 Bcfe of proved reserves. With 1,113 gross operated producing wells, the area produced 234 MMcfe/d in Q1 2017. The Pinedale is a natural gas play, and liquids only comprise 12% of production and 13% of reserves.
Source: QEP Resources
As part of this transaction, QEP has agreed to reimburse Pinedale Energy Partners for certain charges related to gas processing and NGL transportation and fractionation contracts. This agreement only applies to charges before 2020, and in total QEP’s payment will not exceed $45 million. The sale is expected to close by the end of Q3 2017.
The second transaction announced by the company is the sale of certain non-core natural gas assets in Southern Wyoming. The properties sold produced about 4 MMcfe/d in Q1 2017, and represent about 15.2 Bcfe of proved reserves. QEP received $37.5 million for the sale, but did not disclose the buyer.
Commenting on the sale, QEP Chairman, President and CEO Chuck Stanley remarked “Our Wyoming assets have been significant contributors to the company for many years and were critical to our early success. As we continue to evolve as a company, these transactions are a necessary next step in simplifying our asset portfolio and delivering significant financial proceeds that will further strengthen our balance sheet and help fund future development projects and acquisition opportunities.”
Focusing on Permian
QEP is focusing on its liquids-rich, higher margin plays, primarily the Permian. The company owns about 76,000 net acres in the Midland Basin and the Central Basin Platform. Currently there are five rigs active on QEP’s Permian properties, but this may increase as the company was operating one rig on its Pinedale acreage.
Source: QEP Resources
QEP Resources is a presenting company at EnerCom’s The Oil & Gas Conference® which runs Aug. 13-17, 2017, at the Denver Downtown Westin Hotel. To register for the EnerCom conference, please visit the conference website.
