Shale Daily | E&P | Marcellus | NGI All News Access
WPX Sells More Marcellus NatGas Capacity for $200M-Plus
WPX Energy Inc., which last year pulled the anchor in Appalachia to focus on its western portfolio, is selling a package of Marcellus Shale natural gas marketing contracts and related firm transportation capacity for more than $200 million to an undisclosed buyer.
The sale announced Monday includes various long-term gas purchase and sales agreements, as well as 135 MMBtu/d of capacity on the Northeast Supply Line project underway by Transcontinental Gas Pipe Line LLC, or Transco. WPX originally was the exploration arm of Williams, which owns and operates Transco.
“Unwinding non-core positions in an attractive fashion increases our financial flexibility and is further proof of our solid execution,” CEO Rick Muncrief said. “Our team continues to be opportunistic, build our balance sheet strength and act quickly, decisively and creatively.”
Once the transaction is completed, WPX would be released not only from various sales and purchase obligations, but also from $390 million in future demand payments associated with the transport position.
Like its peers, WPX has been working on ways to reduce its overhead as it establishes itself as a western operator. Since the start of the year, the independent has reduced its workforce by 8% and moved most of its regional staff in Denver to Tulsa headquarters (see Shale Daily, March 4). WPX drills for gas and oil in Colorado, North Dakota and New Mexico, where it has more than 5,800 wells.
The agreement is the second by WPX to monetize Marcellus holdings after selling a package of assets in northeastern Pennsylvania to Southwestern Energy Corp. for $300 million (see Shale Daily, Dec. 3, 2014). Although no buyer was named for the WPX contracts, Southwestern has been opportunistic about scooping up available transportation in the Northeast (see Shale Daily, April 24).
The only remaining assets that WPX has in the Marcellus primarily consist of physical operations in Westmoreland County, PA, which are being marketed. Over the past year, WPX has initiated more than $1 billion in transactions to reshape holdings and strengthen its balance sheet. The latest transaction is expected to be completed by the end of June.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 2158-8023 |