Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
EQT Corp., the largest U.S. natural gas producer by volume, has placed a bid on Chevron Corp.’s Appalachia gas properties and a pipeline stake, people familiar with the matter said.
EQT offered $750 million for the properties, one of the people familiar with the matter said.
Chevron last year said it was considering sale of the properties and took an $8.17 billion charge to earnings to write down their value and an unrelated U.S. offshore project. Most of the impairment charge was for the gas properties.
Chevron is marketing about 800,000 acres in the Marcellus and Utica shale basins of Pennsylvania and neighboring states and a 31% nonoperating interest in Laurel Mountain Midstream, which has intrastate and gathering lines servicing the Marcellus shale area.
EQT declined to comment. EQT CEO Toby Rice in July described Appalachia shale as “a buyer’s market,” and called consolidation an opportunity for the Pittsburgh-based company.
Bids for the properties were received on Aug. 12 and are being evaluated, Chevron said in response to inquiries. It declined to comment on the bids.
There is no guarantee the talks will lead to a sale to EQT or another company.
The shale assets are from Chevron’s purchase of producer Atlas Energy for $4.3 billion including debt in 2010, a time when shale gas fields were selling at large premiums. A year earlier, Exxon Mobil Corp. agreed to pay $30 billion for XTO Energy, then a large Appalachian shale basin operator.
The deals soured for both companies. In addition to Chevron’s write-down, Exxon Mobil later took a $2 billion write-down on the value of its natural gas assets.
U.S. natural gas futures are trading at about $2.27 a million Btu and have languished well below their peak 12 years ago when gas traded as high as $12.78 per million Btu.
The Appalachian assets last year produced 262 MMcf of natural gas, on a net daily basis. EQT had average daily sales volumes of about 4.1 Bcf.
Recommended Reading
E&P Highlights: Jan. 8, 2024
2024-01-08 - Here’s a roundup of the latest E&P headlines including the second biggest deepwater gas find of 2023 and new contract awards.
Chevron Hunts Upside for Oil Recovery, D&C Savings with Permian Pilots
2024-02-06 - New techniques and technologies being piloted by Chevron in the Permian Basin are improving drilling and completed cycle times. Executives at the California-based major hope to eventually improve overall resource recovery from its shale portfolio.
Proven Volumes at Aramco’s Jafurah Field Jump on New Booking Approach
2024-02-27 - Aramco’s addition of 15 Tcf of gas and 2 Bbbl of condensate brings Jafurah’s proven reserves up to 229 Tcf of gas and 75 Bbbl of condensate.
Activity Offshore Norway Expected to Remain Steady in 2024
2024-01-11 - The Norwegian Offshore Directorate provided updates on 2023 activity, including 14 wildcat discoveries and eight projects going online and urging exploration in frontier areas.
US Drillers Add Oil, Gas Rigs for First Time in Three Weeks
2024-01-19 - U.S. energy firms this week added oil and natural gas rigs for the first time in three weeks