Chevron’s Appalachian assets appear to be an area of interest for EQT Corporation, which has offered $750 million for the holdings. Entertaining EQT’s bid, Chevron is considering the release of approximately 800,000 acres within the Utica and Marcellus shale plays. The deal would also include a non-operating piece of 31% in Laurel Mountain Midstream, which holds pipelines in the Marcellus.
EQT bio
Headquartered in Pittsburgh, Pennsylvania, and founded 132 years ago, EQT is rooted in hydrocarbon exploration and pipeline transport. Production output in 2019 was reported at 4,131 million cubic feet of natural gas equivalent.
Touted as the largest natural gas producer in the United States, EQT Corporation is a leading independent natural gas producer with operations in Pennsylvania, West Virginia, and Ohio. Chevron’s assets are considered prime, as EQT’s goal is to grow a major asset base in the Appalachian Basin.
Appalachian asset background
Along with some debt, Atlas Energy sold Chevron their assets in 2010. Prior to this sale, XTO Energy sold their holdings to Exxon Mobil Corporation for $30 million. This maneuvering did not prove as lucrative as projected. Chevron took a writedown, and Exxon experienced one of their own with a price tag of $2 billion.
Natural gas production
In 2008, U.S. natural gas traded up to $12.78 per million British Thermal Units (BTUs). Comparatively, today futures trade at approximately $2.27 a million BTUs. Measuring output, last year’s Appalachian assets were responsible for 262 million cubic feet of natural gas. EQT produced sales volumes on a daily basis of around 4.1 billion cubic feet equivalent.
Chevron not giving as clues to the outcome
No definite decision has been made public, but Toby Rice, EQT Chief Executive, commented in July that Appalachia shale is a “buyer’s market.” Chevron’s only response has been that property bids were received on August 12 and are currently being reviewed. EQT is not guaranteed to be the purchaser, as are no other companies.
Nick Vaccaro is a freelance writer and photographer. Besides providing technical writing services, he is an HSE consultant in the oil and gas industry with eight years of experience. He also contributes to Louisiana Sportsman Magazine and follows and photographs American Kennel Club field and herding trials. Nick has a BA in Photojournalism from Loyola University and resides in the New Orleans area. 210-240-7188 [email protected]
