Hess jumps from ship known as Titanic/Utica

Hess Corporation announced Wednesday that it has entered into an agreement to sell approximately 74,000 acres of its dry gas acreage in the Utica Shale to an undisclosed third party for a consideration of $924 million. Approximately two-thirds of these proceeds are expected at the end of the first quarter of this year, with the balance to be received in the third quarter. Proceeds from these sales will be used for additional share repurchases as they are in excess of those associated with the divestiture program announced by the Company March 4 of last year. The Company will determine whether or not to seek an increase to its existing $4 billion share repurchase authorization, approved as part of its March 4 announcement, after a final decision is made either to spin or sell Hess Retail. John B. Hess, CEO of Hess, said, “The sale of our Utica dry gas acreage is an example of our continued commitment to grow shareholder value through ongoing portfolio reshaping. While our wells in the dry gas portion of the Utica were highly productive, we concluded that the potential returns from such an investment, at current and projected natural gas prices, no longer justified retaining this acreage as a strategic part of our overall liquids-based asset portfolio.” -

See more at: http://www.rigzone.com/news/oil_gas/a/131335/Hess_to_Sell_Utica_Dry...

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Permalink Reply by Armstrong Land on January 29, 2014 at 11:33am

Chip,

Do you think that AEP put no value on production or proved reserves?

Permalink Reply by Armstrong Land on January 29, 2014 at 6:04pm

How so?  I don't know the mcf/d but production could lead to bank debt which could fund d&c or additional acquisition.  Producing wells is the only thing AEP lacks, this could accelerate the company. 

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on January 29, 2014 at 6:42am

This has to be Aubrey, right?  Nobody else would pay that much for dry gas assets in today's market.

Permalink Reply by DNH on January 29, 2014 at 6:46am

Depends on the number of wells drilled and their output.  I'd also assume that all of this acreage is HBP.

Permalink Reply by TM on January 29, 2014 at 7:21am
I wonder if this acreage they recently sold was from when they bought Marquette exploration leases back in 2011. I bet most of the land they just sold is mostly in Jefferson County. Anyone else have a guess?
Permalink Reply by martin on January 29, 2014 at 7:31am
From what I hear Jefferson is dry Utica and Hess had a lot of acreage in Jefferson. My first thought was Jefferson. Great River just leased a bunch more in Jefferson. Apparently they think its worth it. I expect Jefferson County to heat up soon. And I am not talking about the weather. Lol
Permalink Reply by Frank Walker on January 29, 2014 at 10:33am

Marcus

Dunno.  But I just checked Bloomberg.  The front month flipped today and NYMEX gas was at $5.56.  That's not high enough for dry Utica, I concede.  But that's a higher price than we have seen for several years.  I think in 2014 somebody is gonna be drilling some wells somewhere, unless the price falls back considerably pretty quick.

Permalink Reply by Paul Martinelli on January 29, 2014 at 11:28am

He sure is betting the Farm on the UTICA

Permalink Reply by Harry E. Rose on January 29, 2014 at 6:50am
Marcus, I had the same thought.
Permalink Reply by martin on January 29, 2014 at 6:57am
Interesting...Enter Aubrey McClendon stage right?
Permalink Reply by martin on January 29, 2014 at 6:58am
Sorry didn't see your post until I posted Marcus. Great minds think alike. :)
Permalink Reply by paleface on January 29, 2014 at 8:39am

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