Equitable Resources Inc. and Range Resources Corp. have formed a joint venture to develop a 300,000-acre natural gas field in southwestern Virginia. Under the plan, Range will pay Equitable $315 million to equalize their interests in the Nora Field, which is located near the Big Sandy shale natural gas field in Kentucky and West Virginia.
When the transaction is completed, which is expected in May, Equitable will continue to operate the producing wells, manage the drilling operations of all future coalbed methane (CBM) wells and manage the gathering system. Range will oversee the drilling of formations below the CBM formation, including the tight gas sand formations, shales and deeper formations. The Nora Field includes 1,600 producing wells, undrilled acreage and a gathering system, including more than 1,150 producing CBM wells and more than 450 producing tight gas sand wells. Given the size of the field, there is potential to drill nearly 6,000 additional CBM wells and tight gas sand wells, the companies said.
"This is a win-win transaction combining the strengths of both organizations," said Range CEO John H. Pinkerton. "The Nora Field has tremendous untapped potential, and this transaction establishes the blueprint to unlock the value by aligning both companies' interest and focusing each company on what it does best."
Range and Equitable said the transaction will allow each company to apply its specific expertise to jointly develop the field more effectively and at a faster pace. Equitable, which is one of the largest operators in the Appalachian Basin, has extensive pipeline assets. Range also has been operating in the basin and is developing and drilling several gas shale plays in the region.
Equitable CEO Murry S. Gerber said his company was excited about expanding its relationship with Range. "Together, we will accelerate the development of the Nora Field at a much faster pace than we could otherwise do on our own."
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