Noble Energy sells upstream Appalachia natural gas assets

Noble Energy Inc. (NYSE: NBL) signed a definitive agreement to divest all of its upstream assets in northern West Virginia and southern Pennsylvania to an undisclosed buyer for a total amount of $1.225 billion. 

The amount includes upfront cash of $1.125 billion and an additional contingent amount of $100 million, structured as three separate payments of $33.3 million.  The contingent payments to the company are in effect should the average annual price realization at Dominion South exceed $3.30 per million Btu in the individual annual periods from 2018 through 2020.

Included in the divestment is current production of approximately 415 million cubic feet of natural gas equivalent per day (88% natural gas) and a 100% working interest in approximately 385,000 acres.  Total proved reserves as of year-end 2016 related to these assets were 1.5 trillion cubic feet of natural gas equivalent.  In addition, the buyer will assume responsibility for up to 430 million cubic feet of natural gas per day of the Company's firm transportation, established to support Marcellus upstream production.    

The Marcellus acreage will retain its dedication to CONE Midstream (NYSE: CNNX) for natural gas gathering.  Noble Energy's interest in CONE Midstream is not included in the transaction.

The transaction is anticipated to close by the end of the second quarter of 2017, with a January 1, 2017 effective date.  Proceeds from the transaction will be used to pay down essentially all of the debt borrowings resulting from the Clayton Williams Energy transaction.

BofA Merrill Lynch acted as financial advisor to Noble Energy and Porter & Hedges served as legal counsel.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...