EQT Corporation (NYSE: EQT) today announced that it will acquire
approximately 58,000 net acres in the Marcellus Shale from a group of
private operators and landowners. The acreage is located primarily in
Cameron, Clearfield, Elk and Jefferson counties in Pennsylvania. The
purchase includes a 200 mile gathering system, with associated rights of
way, and approximately 100 producing vertical wells.
At closing, EQT will pay approximately $280 million, 90% with EQT stock
and 10% with cash. Following the closing of the acquisition, EQT will
hold more than 500,000 net acres in the high-pressure Marcellus shale
fairway. The company expects the transaction to close by April 30,
subject to customary closing conditions.
"We are pleased to add to our substantial, firmly held acreage position
in the heart of the Marcellus fairway. We have extensive midstream
assets and firm contracts to gather and transport natural gas to the
lucrative eastern markets," commented Murry Gerber, chairman and chief
executive officer. "We are receiving a 93% net revenue interest on the
acquired acreage, which is significantly higher than the 80% net revenue
interest that has been typical of recent transactions. Approximately 88%
of the acquired acreage will be held in fee or by production from
existing vertical wells and the remainder of the acreage will be subject
to leases with a weighted average 10-year term."
Marcellus Well Update
"The Marcellus well results continue to exceed our expectations,
therefore we are increasing our average estimated ultimate recovery
(EUR) per well from between 3.5 and 4 Bcfe, to between 4 and 4.5 Bcfe
across our 500,000 acres. We will continue to update our EUR estimates
as we obtain additional well result data. At an average cost of $3.0
million per well, EQT's development cost is estimated to be less than
$0.75 per Mcf, which is among the lowest in the industry," Gerber said.
The 30-day average initial production rate for the company's seven wells
completed in 2010, averaged 7.0 MMcfe per day; ranging between 2.7 MMcfe
and 15.8 MMcfe per day. This average includes results from the company's
most recent well, well 170 in Greene County, Pennsylvania, which has a
30-day average initial production rate of 15.8 MMcfe per day. This well
is located on the same pad as the previously announced Greene County,
Pennsylvaniawell (well 167) which had a 30-day average initial
production rate of 14.3 MMcfe per day.
Cautionary Statements
Disclosures in this press release contain forward-looking statements.
Statements that do not relate strictly to historical or current facts
are forward-looking. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release specifically
include the expectations of plans, strategies, objectives and growth,
including guidance regarding the expected form and amount of
consideration to be paid for the assets to be acquired, the estimated
number of acres and potential drilling locations to be held in the
high-pressure Marcellus fairway following the acquisition and timing of
the closing of the pending acquisition, infrastructure programs,
projected development costs, and estimated ultimate recoveries. These
statements involve risks and uncertainties that could cause actual
results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking statements
on current expectations and assumptions about the future events. While
the company considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks and uncertainties,
most of which are difficult to predict and many of which are beyond the
company's control. The risks and uncertainties that may affect the
operations, performance and results of the company's business and
forward-looking statements include, but are not limited to, those set
forth under Item 1A, "Risk Factors" of the company's Form 10-K filed for
the year ended December 31, 2009, as updated by any subsequent Form
10-Qs.
Any forward-looking statement speaks only as of the date on which such
statement is made and the company does not intend to correct or update
any forward-looking statement, whether as a result of new information,
future events or otherwise.
EQT Corporation is an integrated energy company with emphasis on
Appalachian area natural gas production, gathering, processing,
transmission and distribution. Additional information about the company
can be obtained through the company's web site, http://www.eqt.com;
Investor information is available on that site at http://ir.eqt.com.
EQT Corporation uses its web site as a channel of distribution of
important information about the company, and routinely posts financial
and other important information regarding the company and its financial
condition and operations on the Investors web pages.
