Trans Energy Inc. (OTC: TENG) signed an agreement to divest its Marcellus assets in Tyler County, W.Va., for $11.2 million, the company announced on Oct. 2.
The divestiture consists of 1,163 net acres, two pad sites, and one uncompleted horizontal Marcellus well. The acreage represents 6% of Trans Energy's total net acreage position targeting the Marcellus shale. The company has not completed the horizontal Marcellus well in Tyler County and no longer plans to complete either of the two previously announced wells before the closing of the transaction. The transaction is expected to close before year end 2013, pending satisfactory title diligence by the buyer.
"Today's announcement supports our belief that Marcellus shale acreage in northwest West Virginia is highly valuable," John Corp, Trans Energy president, said in the release.
"While we believe Tyler County is located in an attractive part of the Marcellus shale, we determined that our acreage position in the county was not large enough to warrant spending additional resources. Moreover, we believe that allocating the proceeds from the sale toward development of our core acreage positions in Marshall, Wetzel and Marion counties can further enhance the value of our positions in those counties, thereby increasing shareholder value," Corp said.
After the sale, Trans Energy will continue to own 17,500 net acres in Marshall, Wetzel and Marion counties.
Trans Energy Inc. is an independent energy company engaged in the acquisition, exploration, development, and production of natural gas and oil in West Virginia. The company is based in St. Marys, W.Va.