Oil & Gas

16 Apr 2024

EQT to Sell Some Natgas Assets in Pennsylvania to Equinor USA

16 Apr 2024  by reuters   

The logo of Equinor is set up at the entrance of a building at Western Europe's largest liquefied natural gas plant Hammerfest LNG in Hammerfest, Norway, March 14, 2024. REUTERS/Lisi Niesner/File Photo Purchase Licensing Rights
EQT (EQT.N), opens new tab will sell 40% interest in its non-operated natural gas assets in northeast Pennsylvania to Equinor USA in exchange for Equinor's onshore asset in the Appalachian basin and $500 million in cash, the companies said on Monday.

Non-operating positions give holders a cut from the hydrocarbons sold without taking charge of drilling or other operations, although they must contribute their share of costs.

Natural gas prices have plunged to three-year lows, forcing producers to curb output and spending on drilling activity, especially in the Marcellus and Utica shale regions.

Reuters reported last year that EQT was exploring a sale of a portfolio of minority stakes in wells in Pennsylvania's Marcellus shale formation.

"We plan to opportunistically divest the remaining portion of our non-operated assets in northeast Pennsylvania," EQT CEO Toby Rice said on Monday.

EQT's plan to exit the position comes as the company tries to accelerate cutting its $5.9 billion debt pile and boost shareholder returns.

The company said on Monday it expects the assets acquired from Equinor to generate nearly $75 million in free cash flow in 2025.

"This (deal) also means that we have now fully exited all operated positions onshore U.S.," Philippe Mathieu, executive vice president for Exploration and Production International at Equinor, said.

Norway's Equinor (EQNR.OL), opens new tab had been reviewing assets to exit several countries, including the United States, looking to focus on offshore operations instead of onshore ones.

EQT's stock was marginally down, while Equinor shares ended the day 3% lower.


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