PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE: EQT) today announced that it has signed a definitive agreement for the purchase of roughly 99,000 net acres in southwestern Pennsylvania and 10 horizontal Marcellus wells, located in Washington County, PA, from Chesapeake Energy Corporation and its partners for approximately $113 million, subject to closing conditions. The acreage includes 67,000 Marcellus acres and 32,000 dry Utica acres. Of the total purchase price, $60 million is allocated to the undeveloped acreage, while the remaining $53 million is for the existing Marcellus wells. The transaction is expected to close on May 30, 2013.
The acquisition includes approximately 25,000 acres within EQT's core Marcellus development areas of Washington, Greene, and Allegheny counties. This core acreage is conducive to development through the Company's preferred use of multi-well pad drilling and extended laterals. The remaining 42,000 Marcellus acres are unlikely to be developed due to near-term lease expirations or a scattered footprint.
Three of 10 the Marcellus wells are currently producing, and the remaining seven will be turned in line by year-end 2013 – adding approximately 1.0 Bcfe of sales volume. These existing wells have an average lateral length of 4,200 feet and in total represent about 54.0 Bcfe of proved developed reserves.
Upon close of the transaction, EQT anticipates drilling four wells on the new acreage in late 2013. This acquisition will not have a significant impact to EQT's 2013 capital budget or sales volume guidance, which was recently increased to 340 – 350 Bcfe.
About EQT Corporation:
EQT Corporation is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, transmission, and distribution. EQT is the general partner and majority equity owner of EQT Midstream Partners, LP. With more than 120 years of experience, EQT is a technology-driven leader in the integration of air and horizontal drilling. Through safe and responsible operations, the Company is committed to meeting the country’s growing demand for clean-burning energy, while continuing to provide a rewarding workplace and enrich the communities where its employees live and work. Company shares are traded on the New York Stock Exchange as EQT.
Visit EQT Corporation on the Internet at www.EQT.com.
Disclosures in this press release contain forward-looking statements. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements specifically include the expectations regarding the announced transaction and the operational performance of EQT and its subsidiaries, including guidance regarding production and sales volumes, capital expenditures, reserves, the timing of a closing of the transaction, and the number of wells to be drilled on, and the reserves producible from, the acquired properties following the closing. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. EQT has based these forward-looking statements on current expectations and assumptions about future events. While EQT considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond EQT's control. With respect to the proposed transaction, these risks and uncertainties include, among others, the risk that the conditions to closing may not be satisfied for some or all of the acreage and that the acquired properties. The risks and uncertainties that may affect the operations, performance and results of EQT's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of EQT's Form 10-K for the year ended December 31, 2012, as updated by any subsequent Form 10-Qs.
Any forward-looking statement speaks only as of the date on which such statement is made and EQT does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.