DTE Energy on Friday agreed to sell a portion of its Barnett Shale natural gas properties in Texas to an undisclosed third party for $260 million. The properties include 153 Bcf of proved and probable reserves on 11,000 net acres in the core of the play.
“This sale is another example of the strong value we have been able to create and realize through the execution of our nonutility monetization plan,” said CEO Anthony F. Earley Jr. “Given the very successful monetizations of our Antrim and Barnett gas production assets this year, I am confident that we will be able to create significant value for our shareholders over the coming years developing our remaining Barnett properties.”
DTE, which is based in Detroit, agreed in May to sell all of its Antrim Shale gas properties in Michigan to Atlas Energy Resources LLC for $1.225 billion (see Daily GPI, May 22). The company in 2006 restructured its nonutility operations to simplify its earnings structure and redeploy cash for its utilities and midstream operations (see Daily GPI, Nov. 8, 2006).
The company has retained 44,000 acres in the western part of the Barnett Shale for “continued development.” It has 108 gross producing wells on its western Barnett acreage, primarily in Jack, Erath and Parker counties in Texas. The transaction announced Friday is expected to close in January.
DTE now expects to use $1 billion of the total after-tax cash proceeds to repurchase stock, an increase of $100 million over its previous guidance. To date the company has repurchased about $725 million and expects to reach $1 billion in common share repurchases following the close of its asset sales. JP Morgan Securities Inc. acted as financial adviser.
DTE will host a conference call at 9 a.m. EST Monday to discuss the Barnett sale and update the investor community on the nonutility monetization plan. The Internet broadcast may be accessed at www.dteenergy.com/investors and the telephone dial-in numbers are (877) 856-1968 or (719) 325-4818.
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