Southwestern Energy Buys 162,000 Acres From Chesapeake for $574/Acre

HOUSTON, April 29, 2013 /PRNewswire/ -- Southwestern Energy Company today announced that it has signed a definitive purchase agreement to acquire natural gas properties located in Pennsylvania prospective for the Marcellus Shale from Chesapeake Energy Corporation and its partners for approximately $93 million, subject to closing conditions. Upon closing, Southwestern intends to use its revolving credit facility to finance the acquisition. The company anticipates the acquisition to close on or around May 15, 2013.

"2013 is already proving to be an exciting year for Southwestern Energy," stated Steve Mueller, President and Chief Executive Officer of Southwestern Energy. "This acquisition of approximately 162,000 net acres is near our existing position and provides Southwestern with even greater exposure to a world-class resource where we can further showcase our operational strengths. The key acreage is located in Susquehanna, Wyoming, Tioga and Sullivan counties. Current net production from these properties is approximately 2 MMcf per day from 17 gross wells (1.2 net wells). Upon closing of this transaction, our acreage position of approximately 337,000 net acres in the Marcellus strengthens our ability to provide future double-digit production and reserve growth."

A table and map of the company's approximate post-closing acreage position in Pennsylvania are shown below:

County

SWN Net Acres
Prior to

Acquisition

Net Acres Acquired

SWN Total
Net Acres

Bradford

21,000

--

21,000

Columbia

--

500

500

Lackawanna

24,700

14,000

38,700

Luzerne

--

3,000

3,000

Lycoming

21,000

--

21,000

Sullivan

--

25,500

25,500

Susquehanna

81,600

51,000

132,600

Tioga

--

15,000

15,000

Wayne

20,000

--

20,000

Wyoming

7,000

53,000

60,000

Total

175,300

162,000

337,300

 

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Replies to This Discussion

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on April 29, 2013 at 3:43am

Man, CHK is desperate. 

Permalink Reply by Markus on April 29, 2013 at 3:54am

Makes me wonder just how low they will go on these two listings with Meagher Energy Advisors - the first which has been languishing for almost a year now...

http://www.meagheroil.com/resources/project/Chesapeake%20Utica-Poin...

http://www.meagheroil.com/resources/project/Chesapeake%20Portage%20...

Permalink Reply by wyalusing jim on April 29, 2013 at 4:17am

i'm scratching my head wondering what the heck swn is thinking.

500 acres in columbia county? 3000 in luzerne? those counties have already been abandoned by drillers.

and the 53,000 in wyoming county really gets me wondering. i know that chk leased a whole bunch of wyoming county, but is only drilling the northwest corner.

swn probably knows more about lackawanna county than any other driller, so that may bode well for that area, and the susquehanna acreage probably gives them more contiguous acreage in their current exploration focus.

all in all though, they seem to have acquired alot of highly speculative acreage. probably the reason for the low price.

wj

Permalink Reply by p umpjack on April 29, 2013 at 4:24am

cost average acreage keep the good throw out the poor  susquhanna is the prize dry gas

pieces parts to trade in other areas    swn is the winner and chk props up the books

Permalink Reply by wyalusing jim on April 29, 2013 at 4:30am

regarding the susquehanna acreage, it'd be interesting to see where exactly it is.

dimock sure is a prize, but if they were selling dimock area acreage i'm sure it would have gone to cabot. the farther north, east and west you go from there, the more speculative it becomes though.

i hope they put out a map.

wj

Permalink Reply by Roger Pyle on April 29, 2013 at 4:35am
Permalink Reply by wyalusing jim on April 29, 2013 at 4:52am

thanks roger, great map.

yeah, chk dumped a bunch of junk on swn for sure. that's why it went cheap.

in wyoming county they got the acreage that chk had to take to get the good stuff in the wycogg.

in northeast susquehanna i'm sure that hess would love to sell some to them too, and some of that area might prove up someday.

the tioga stuff might turn out ok, the sullivan stuff is dangerously south though. not much in columbia, probably just some odd parcels thrown in to get rid of 'em.

interestingly, i know that chk has some wayne county acreage, but swn didnt bite on that even though some of it's just over the county line and in the srbc.

i wonder if swn will even file assignments on alot of that stuff. seems like that'd be another waste of money.

wj

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on April 29, 2013 at 7:05am

"chk dumped a bunch of junk on swn for sure. that's why it went cheap."

SWN got enough good stuff to make it worthwhile.  Look at what DVN is doing in Ohio.  They're selling garbage but the 30,000+ acres in Guernsey will be enough to attract a buyer (maybe) and they'll walk away without losing thier butts.

Additionally, how much did CHK waste to get that acreage in the first place?  Ever since Aubrey left they haven't been able to get a decent deal done.

Permalink Reply by Mike C. on April 29, 2013 at 6:44am

CHK does not own any leases in the Dimock area.  Cabot controls 90% of that township, maybe more.  My guess is they sold their NW Susquehanna holdings.  Also if the Wyoming acreage sold is in the south half of the county SWN overpaid.  Couple that with the fact that most of those leases have a $3000 plus renewal bonus set to be paid and CHK actually made out ok on the deal.

 

 

Permalink Reply by Susquehanna Sally on April 29, 2013 at 8:34am

jack- Would be interesting to ascertain the total original financial bonus outlay on this acreage by CHK. I'm sure a good portion was well under the 500/acre mark with 12.5%. I had neighbors sign for 500/12.5 with CHK 7,8,and some 10 year terms. Just looks like further delineation to me. Everybody hang on to your a#@es as SWN lowballs lease renewals. .

Permalink Reply by Jesse V. on April 29, 2013 at 4:58am

Can someone please clarify this for me. Has SWN acquired all CHK's partners interest in these leases? If so it seems to be a great deal. Granted many leases with a straight 5 year term are due to expire relatively soon but still they got some great acreage for a good price. I've read very good things over the last year about SWN, mostly with regard to their development in Susquehanna County. Landowners involved should be happy about this. It's interesting that CHK kept their leasehold in all of Bradford County and the Western portion of Susquehanna County.

Permalink Reply by wyalusing jim on April 29, 2013 at 5:03am

good question jesse, but it is of course also possible that none of chk's partners were interested in these leases anyway since chk hasnt developed these areas. they may be wholly owned by chk.

and yeah, no surprise that swn got no bradco acreage at all. but they did do some swapping early on here.

wj

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