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Range Sells Nora CBM Assets for $876M to Pay Down Debt

Range Resources Corp. said late Tuesday it has an agreement to sell its coalbed methane (CBM) assets in Virginia's Nora Field for $876 million, delivering on a plan to ditch noncore properties, raise more liquidity and cut its debt during the commodity downturn.

The properties being sold include 460,000 net acres in the combined Nora/Haysi fields of southwestern Virginia, which produced 109 MMcf/d in 3Q2015, or 7.5% of net production. The sales agreement with EnerVest Ltd. is expected to close by the end of the year.

"We will continue to review our portfolio for opportunities to bring value forward where other assets cannot compete for capital in comparison to our 1.6 million stacked-pay acreage position in the Marcellus, Utica and Upper Devonian," said CEO Jeff Ventura.

Range's drilling program in the Nora Field had been suspended. Drilling in the Midcontinent and Northeast Pennsylvania has also been idled on low oil and gas prices. While it's long been focused on its Pennsylvania assets, Range has mostly zeroed its efforts to the Marcellus this year, where low-cost, high-quality operations are making it hard for even the nascent, but prolific Utica development in Southwest Pennsylvania to compete (see Shale DailyOct. 29).

Range, which had $876.2 million of available liquidity at the end of the third quarter, said it would use proceeds from the sale to "strengthen the company's financial position."

Range announced an asset swap with EQT Corp. last year that transferred its holdings in the Conger Field of West Texas in exchange for cash and Nora assets that included 138,000 net acres and a 50% interest in 1,200 miles of gathering pipelines and compression (see Shale DailyMay 1, 2014). That deal boosted Range's Nora position to 385,000 net acres.

The producer has blocked up the acreage since, and a year ago, management said it was making low-tech tweaks and "major well design changes" to sap more production from the assets (see Shale DailyOct. 30, 2014). The sale included 3,500 operated wells. But combined with the Midcontinent, the Nora was expected to account for only 5% of the company's capital expenditures this year.

On a third quarter earnings call last month, Ventura said the company expected to complete one or more asset sales by year's end.

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