Southwestern Energy Co. (NYSE: SWN) said June 9 it will sell 55,000 net acres in southwest Appalachia, with the deal’s $450 million in proceeds earmarked for reducing debt.
Southwestern will sell the to acreage Antero Resources Corp. (NYSE: AR). In 2016, Southwestern has put up for sale acreage in the Montana Bakken Shale, North Louisiana, Mississippi and Colorado.
Antero said about 75% of the acreage contains Utica rights.
The acquisition includes properties located in Doddridge, Harrison, Marion, Monongalia, Pleasants, Ritchie, Tyler and Wetzel counties, W. Va.
The assets currently produce about 14 million cubic feet equivalent per day (MMcfe/d) from the Marcellus Shale.
Wetzel, Tyler and Doddridge counties contain undeveloped acreage. Antero said it will increase its 2017 production growth target to a range of 20% to 25%.
"This transaction is one step on delivering on the commitment we made to strengthen our balance sheet in 2016," Southwestern Energy president and CEO Bill Way said. "We are bringing forward the value of acreage that is much longer dated in our development plans, enabling us to take action and proactively reduce outstanding debt.”
Antero president and CFO Glen Warren said that with savings achieved year-to-date from service cost reductions and operating efficiencies, “we expect to add an additional rig in the second half of the year while maintaining our original drilling and completion budget of $1.3 billion.”
The additional rig, which will focus primarily on Tyler County, will enable Antero to accelerate production, Warren said, adding the company will see a “minimal increase” to its 2017 drilling and completion capital budget compared to 2016.
The transaction is expected to close in the third quarter of 2016.
Darren Barbee can be reached at dbarbee@hartenergy.com.
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