QEP Resources Inc., which is inching toward Permian Basin pure-play status, agreed Monday to cast off its Haynesville Shale/Cotton Valley assets in northwestern Louisiana to Aethon Energy for $735 million.

Included in the transaction are producing properties, undeveloped acreage and associated gas gathering/treating systems.

"The sale of our Haynesville/Cotton Valley business is an important next step in our process of becoming a Permian pure-play company,” QEP CEO Chuck Stanley said. Sale proceeds would fund the Denver-based producer’s ongoing development in the Permian, as well as reduce debt and repurchase shares.

Earlier this month, QEP secured a $1.725 billion deal to sell Montana and North Dakota assets in the Williston Basin to Vantage Energy Acquisition Corp. QEP earlier this year signaled its intent to become a Permian pure-play, where it mostly works in the Midland sub-basin of West Texas.

Dallas-based Aethon agreed assume all of QEP’s firm gas transportation agreements in the Haynesville. In addition, QEP plans to replace (novate) for Aethon natural gas derivative contracts covering about 40 Bcf for the last 11 months of 2019.

Aethon, a private equity, focuses on directly investing in North American onshore upstream assets. Affiliate Aethon III, which is purchasing the QEP portfolio, is an investment vehicle formed to acquire North American onshore assets in partnership with the Ontario Teachers’ Pension Plan and Redbird Capital Partners. 

The transaction is expected to be completed in January. Latham & Watkins LLP provided legal counsel to QEP, while Weil, Gotshal & Manges LLP and Sidley Austin LLP provided legal counsel to Aethon.