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.” -
Do you think that AEP put no value on production or proved reserves?
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.
This has to be Aubrey, right? Nobody else would pay that much for dry gas assets in today's market.
Depends on the number of wells drilled and their output. I'd also assume that all of this acreage is HBP.
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.
He sure is betting the Farm on the UTICA