By CASEY JUNKINS
WHEELING, W.Va. - Via a $1.24 billion deal, yet another company is selling out its Marcellus and Utica shale operations to focus drilling and fracking efforts elsewhere, marking a two-year stretch of firms opting out of the still-burgeoning play.
After amassing and developing thousands of acres for several years, Chesapeake Energy sold its West Virginia operations to Southwestern Energy Co. for $5 billion in 2014. Likewise, Gastar Exploration sold its Mountain State properties, primarily in Marshall and Wetzel counties, for $80 million earlier this year.
Now, Houston-based Anadarko Petroleum Corp. will sell 195,000 Marcellus Shale acres to Alta Resources Development for $1.24 billion, or about $6,359 per acre. Much of this acreage is located in central Pennsylvania.
"With this transaction, we have announced or closed monetizations totaling well in excess of $5 billion in 2016, while principally focusing Anadarko's U.S. onshore activities on our world-class oil-levered assets in the Delaware and DJ basins,"Al Walker, Anadarko chairman, president and CEO, said. "Our Marcellus team has done a superb job of maximizing the value of our position in this natural gas play, and we are grateful for their efforts and dedication."
The Delaware Basin is largely found in Texas and New Mexico, while the DJ Basin is mostly in Colorado.
As with many companies struggling through the low commodity price environment during the last two years, Andarko reported a loss during the third quarter this year. The $830 million deficit was disappointing for Walker, but he remains upbeat for the long-term.
The other company selling acreage is State College, Pa.-based Eclipse Resources, which is unloading 9,900 acres, with much of this in Monroe County, for $63.8 million - or about $6,444 per acre.
"We are excited to complete this non-core acreage divestment that further enhances our liquidity as we prepare to accelerate our growth in the coming year. The acreage we divested was not in our near-term drilling program, did not permit us to drill wells with lateral lengths that meet our internal planning requirements, and would have required future lease extension payments," Eclipse Chairman, President and CEO Benjamin Hulburt said. Earlier this year, the company drilled its famous "Purple Hayes" near Quaker City in Guernsey County. This operation, featuring a lateral shaft stretching about 3.5 miles outward, is not part of the company's sale.
"We are currently in the process of completing our 2017 capital expenditure plan, which we expect to release early in the first quarter," Hulburt added.
Eclipse reported a loss of $26.8 million for the third quarter.
WHEELING - Oil and natural gas industry leaders say requiring more ethanol in gasoline will cost motorists up to 26 cents more per gallon of fuel, but Environmental Protection Agency officials believe the practice will "measurably reduce carbon emissions."