By Arathy S Nair, Shariq Khan and Jessica Resnick-Ault
(Reuters) – EQT Corp
EQT offered $750 million for the properties, one of the people familiar with the matter said.
Chevron last year said it was considering sale of the properties and took an $8.17 billion charge to earnings to write down their value and an unrelated U.S. offshore project. Most of the impairment charge was for the gas properties.
Chevron is marketing about 800,000 acres in the Marcellus and Utica shale basins of Pennsylvania and neighboring states and a 31% non-operating interest in Laurel Mountain Midstream, which has intrastate and gathering lines servicing the Marcellus shale area.
EQT declined to comment. EQT Chief Executive Toby Rice in July described Appalachia shale as “a buyer’s market,” and called consolidation an opportunity for the Pittsburgh-based company.
Bids for the properties were received on Aug. 12 and are being evaluated, Chevron said in response to inquiries. It declined to comment on the bids.
There is no guarantee the talks will lead to a sale to EQT or another company.
The shale assets are from Chevron’s purchase of producer Atlas Energy for $4.3 billion including debt in 2010, a time when shale gas fields were selling at large premiums. A year earlier, Exxon Mobil Corp.
The deals soured for both companies. In addition to Chevron’s writedown, Exxon later took a $2 billion writedown on the value of its natural gas assets.
U.S. natural gas futures
The Appalachian assets last year produced 262 million cubic feet of natural gas, on a net daily basis. EQT had average daily sales volumes of about 4.1 billion cubic feet equivalent.
(Reporting by Shariq Khan and Arathy S Nair in Bengaluru; Jessica Resnick-Ault and David French in New York; Editing by Cynthia Osterman)
