Houston-based Southwestern Energy Company’s (SWN) share price surprised with a fall of 1.6% following the news that the company has inked a purchase and sale agreement for an undivided 20% of Statoil ASA's (STO) ownership in oil and gas assets in West Virginia and southwest Pennsylvania. Subject to adjustments, the purchase price has been fixed at $394 million.
This announcement comes a day after the company closed a nearly $4.98 billion deal to acquire Oklahoma City-based Chesapeake Energy Corp.’s (CHK) interest in 413,000 acres in the Marcellus and Utica shale plays. The deal was initially valued at $5.38 billion when it was announced in Oct 2014.
Southwestern Energy’s latest purchase from Statoil is equal to 30,000 net acres and increases the company's overall working interest in the assets to approximately 73%, up by about 5.8%. As of Oct 2014, Statoil's net production from these properties was approximately 29 million cubic feet of gas equivalent per day. The deal is likely to close in early 2015 and will possibly be financed from the company’s revolving credit facility.
These deals signify Southwestern Energy’s endeavours to grow its footprint in the Marcellus and Utica shale plays. The company has been making a big push in these plays. Earlier, this year, it obtained oil and gas assets in the Marcellus Shale and assumed additional firm transportation capacity in a $300 million deal with WPX Energy Inc. (WPX).
Southwestern Energy engages in the exploration, development and production of natural gas and crude oil in the United States. The company operates in two segments, Exploration and Production and Midstream Services.
Southwestern Energy carries a Zacks Rank #3 (Hold).
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