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Noble Energy sells Appalachian assets for $1.2bn

03 May 2017 20:34 (+01:00 GMT)
Noble Energy sells Appalachian assets for $1.2bn

Houston, 3 May (Argus) — Independent producer Noble Energy has sold its upstream assets in northern West Virginia and southern Pennsylvania to an undisclosed buyer for $1.2bn.

After a year of low natural gas prices in 2016, some Appalachian producers have sought to offload acreage in the Marcellus and Utica shales, while others are ramping up drilling activity now that prices have recovered.

Noble Energy has opted to divest its Marcellus position to focus on liquids-rich, higher-margin assets, chief executive David Stover said.

"This enables us to further focus our organization on our highest-return areas," Stover said.

Included in the divestment is current production of about 415mn cf/d of natural gas equivalent (cfe/d) (12mn m³/d), 88pc of which is natural gas. The buyer will also receive full working interest in about 385,000 acres, meaning it would be responsible for the ongoing costs associated with producing there.

Total proven reserves of the assets as of year-end 2016 were 1.5 Tcfe. The buyer will also assume responsibility for up to 430mn cf/d of Noble's firm transportation capacity, established to support Marcellus upstream production.

The sale is expected to close by the end of the second quarter, with a 1 January 2017 effective date.