Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
EQT and Equinor Swap Marcellus and Utica Shale, Strengthen Appalachian Onshore Assets in the US
04/16/2024
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.
The assets EQT in this transaction include:
- Approximately 26,000 net acres in Monroe County, Ohio, with an expected net production in 2025 of about 135 million cubic feet per day (MMcfd). These acres are directly adjacent to areas where EQT already operates.
- Around 10,000 net acres in Lycoming County, Pennsylvania, where the anticipated net production in 2025 is roughly 15 MMcfd, complementing existing EQT-operated assets.
- An additional 16.25% ownership stake in EQT-operated gathering systems that service the core-operated acreage in Lycoming County, Pennsylvania.
- A gas buy-back agreement in which Equinor will purchase gas from EQT at a premium to the typical pricing in the basin, extending through the first quarter of 2028.
Specifically, Equinor will relinquish 100% interest and operatorship of its onshore assets in the Appalachian Basin, located in southeastern Ohio. In return, it will acquire 40% of EQT's non-operated working interest in the Northern Marcellus shale formation in Pennsylvania.
Additionally, Equinor will pay EQT $500 million in cash to balance the transaction. This swap aims to enhance cash flows and reduce CO2 emissions intensity within Equinor's international portfolio.
After this deal, Equinor's average working interest will increase from 15.7% to 25.7% in certain gas units in the Northern Marcellus, operated by Chesapeake. To fulfill existing gas sales agreements, Equinor will also enter into a gas buy-back agreement with EQT.
“With this transaction, we continue to high-grade the US portfolio and improve profitability by strengthening our gas position in the most robust part of the Appalachian Basin. These assets are well-positioned to leverage anticipated positive developments in the US gas market. The proposed swap improves portfolio robustness with an expected reduction in well break-evens and upstream carbon intensity. This also means that we have now fully exited all operated positions onshore US.”
- Philippe Mathieu, executive vice president for Exploration and Production International at Equinor
Recent Pipeline Expansion and LNG Deals
In March, EQT announced it is merging with Equitrans, its previous midstream unit, in a deal worth $5.45 billion. This merger will form the only large-scale, vertically integrated natural gas company in the U.S., aiming to compete internationally. This strategy is similar to Chesapeake Energy's reasoning for its $7.4 billion merger with Southwestern Energy in January. EQT mentioned that the new company's total value would be over $35 billion once the merger is complete.
The new entity will have substantial resources, boasting 27.6 trillion cubic feet equivalent (Tcfe) of proven reserves spread over about 1.9 million net acres. It will produce 6.3 billion cubic feet equivalent per day (Bcfe/d) and handle more than 8 Bcfe/d of gathering throughput across 3,000 miles of pipeline. With these capabilities, EQT will be the largest natural gas producer in the U.S.
In response to a worldwide oversupply of natural gas, EQT is scaling back its output significantly, planning to cut nearly 1 billion cubic feet per day of natural gas production this month. This step is part of a wider industry trend where companies are reducing production and drilling to adapt to the market's current demands.
The acquisition of Equitrans Midstream will allow EQT to better manage its pipeline and processing costs, which is crucial as the company looks to profit from exporting LNG globally, taking advantage of potentially higher prices in other markets.
An important benefit of this deal is the addition of over 2,000 miles of pipelines to EQT’s assets, boosting its ability to produce and transport natural gas efficiently. Jeremy Knop, the finance chief at EQT, stressed the importance of maintaining low operational costs to stay competitive.
EQT has also established preliminary deals with LNG companies like Commonwealth LNG, Glenfarne Energy Transition, and Energy Transfer. These partnerships are strategic steps toward securing access to international markets, highlighting EQT's commitment to diversifying its income sources and growing its global presence in the LNG market.
Equitrans Midstream, now part of EQT, is the main partner and operator of the Mountain Valley natural gas pipeline. Despite some regulatory and legal issues since it started in 2018, this pipeline is strategically important, especially given its location in the U.S. Northeast.
About Equinor
Since 2020, Equinor has earned $11 billion from its operations in the U.S. Before this latest deal, the company's position in the Appalachian basin was its last remaining operatorship in the onshore U.S.
Equinor is a global energy company with roots in Norway. Formerly known as Statoil, the company has 20,000 dedicated employees working across more than 30 countries. Equinor is not only the leading operator in Norway but also one of the largest offshore operators worldwide and is increasingly making its mark in the renewable energy sector.
About EQT Corporation
EQT Corporation is the United States' largest natural gas producer, with its operations primarily located in Pennsylvania, West Virginia, and Ohio. As a leading independent natural gas production company, EQT is focused on developing its substantial asset base in the Appalachian Basin. The company is committed to being the preferred operator for its stakeholders and is known for its focus on operational efficiency, technological advancement, and sustainability.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
EQT Completes Long-Awaited $5.2 Billion Acquisition of Tug Hill and XcL Midstream
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/179Blog_EQT Finally Purchased Tug Hill and XcL Midstream’s Appalachian Assets.png)
EQT disbursed roughly $2.4 billion in cash and issued 49.6 million shares of its common stock to acquire the Tug Hill and XcL Midstream assets. On August 22, EQT Corp. announced the completion of its long-delayed acquisition of XcL Midstream, following extensive Federal Trade Commission (FTC) reviews. The final purchase, post-price adjustments, consisted of about $2.4 billion in cash and 49.6 million EQT common shares. The cash component was financed through a $1.25 billion term loan, $1 billion from existing cash reserves, and a previously escrowed $150 million deposit.
Appalachian Basin Overview: Marcellus, Utica, Trends, Predictions, 2022 vs 2023
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R262_Blog_Appalachian Basin Overview_ Marcellus, Utica, Trends, Predictions, 2022 vs 2024.png)
Appalachian Basin (formerly Marcellus and Utica) covers most of New York, Pennsylvania, Eastern Ohio, West Virginia, and Western Maryland in the north, reaching down to parts of Northwest Georgia and Northeast Alabama in the south. The basin is massive, covering about 185,000 square miles, roughly 1,000 miles long from northeast to southwest, and in some places, it's up to 300 miles wide. In this area, some major companies are making significant investments. EQT stands out as the largest producer in the Appalachian Basin, with other key players including Chesapeake, Range Resources, Antero, Repsol, and Gulfport also actively investing.
TotalEnergies kicked off 2024 with a net income of $5.7 billion in the first quarter, marking a modest 3% increase from the same period last year and a 13% rise from the previous quarter. This growth occurred despite experiencing drops in both the volume and price of gas sales over the year and the quarter. Their adjusted net earnings, which exclude one-time or unusual items, were $5.1 billion. This represents a significant 22% decline compared to last year and a slight 2% drop from the last quarter. The company's earnings before tax, depreciation, and amortization reached $11.5 billion, while their cash flow from operations significantly decreased to $2.2 billion, falling by 58% from last year and a steep 87% from the previous quarter. TotalEnergies also recorded $644 million in impairments.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R268_Blog_Rockies Overview by Rextag_ Green River, Powder River, Niobrara-Denver Julesburg, Piceance, Uinta, San Juan, Paradox Basin, Wyoming, Colorado, Utah, New Mexico.png)
New Mexico leads the Rockies region in gas production and ranks as the sixth-largest in terms of active gas wells in the U.S. Last year, the state's gas well count slightly increased by 0.2% to 30,699, with new additions in both the northwestern San Juan Basin and the southeastern Permian Basin. Meanwhile, just to the north in Colorado, gas producers grew by a modest 0.1% to 30,322, primarily due to increased drilling activity in the DJ and Piceance basins. Wyoming saw a decline in its active gas wells by 3.7%, down to 17,006, with production mainly in Sublette, Sweetwater, and Converse counties reflecting stable or slightly reduced drilling activity. Utah also experienced a slight decrease of 0.2% in its number of gas wells, totaling 6,463. In Q1 2024, oil and gas industry activity in Oklahoma, Colorado, and northern New Mexico experienced a decline. This marks the fifth consecutive quarter of contraction in drilling and business activities within these regions. According to a survey that included responses from 33 firms operating in the Rockies, this downtrend is expected to continue over the next six months.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R265_Blog_Williston Basin Overview_ 2022 vs 2023, Bakken Shale, Operators, Deals, 2024 Update.png)
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.