Southwestern Energy To Buy Assets From WPX For About $300 Mln

(RTTNews) - Southwestern Energy Co (SWN), Tuesday agreed to purchase oil and gas assets including approximately 46,700 net acres in northeast Pennsylvania from WPX Energy Inc (WPX) for about $300 million, subject to customary closing conditions. The acreage is currently producing approximately 50 million net cubic feet of gas per day from 63 operated horizontal wells.

Also as part of the transaction, Southwestern will assume firm transportation capacity of 260 million cubic feet of gas per day predominantly on the Millennium pipeline effective upon closing.

The transaction is conditional upon receiving a waiver from the Federal Energy Regulatory Commission regarding transfer of the firm transportation capacity and is currently expected to close in the first quarter of 2015. Southwestern intends to use its revolving credit facility to finance the acquisition.

"We are very excited about the addition of this asset and firm transportation capacity to our portfolio," said Steve Mueller, Chief Executive Officer of Southwestern Energy.

"This acreage position complements our existing Marcellus acreage in northern Susquehanna County where we have recently seen very good results from two of our wells, the Hughes North 1H and the Dayton 4H... Further, the additional firm transportation capacity adds to our existing firm transportation portfolio to provide 1.3 Bcf per day of firm transport capacity upon closing and growing to 1.4 Bcf per day by the end of 2016. The immediate availability of this firm transportation provides the pathway for ongoing growth in production over the next three years and the added acreage solidifies future value through a growing well inventory."

Meanwhile, for WPX, its first transaction involving its Marcellus Shale operations marks the company's sixth significant agreement it has entered into since May to narrow the company's business focus, increase scalability of core assets, bring value forward and further strengthen its balance sheet. As previously announced, WPX also recently executed a new five-year, $1.5 billion senior unsecured credit facility.

WPX's remaining operations in the Marcellus Shale primarily consists of its physical operations in Westmoreland County in southwestern Pennsylvania and additional firm transport capacity on Transco's Northeast Supply Link line. These assets also are targeted for divestiture.