After finding 41 million cubic feet of Utica Shale natural gas per day via its Belmont County Bigfoot well, Rice Energy officials are now turning their attention east by paying $336 million to purchase 12 active Marcellus shale wells from Chesapeake Energy.
In announcing the deal Monday, Toby Rice, president and chief operating officer for Rice Energy, said the package will also include 22,000 leasehold acres in the western portion of Greene County, Pa., which is just across the state line from Marshall County.
"The acquired assets provide us with a foothold to pursue additional leasehold opportunities and further grow our inventory of low-risk, high-return projects," Toby Rice said.
Rice Energy, the company pumping an average of 41 million cubic feet of natural gas per day at the Bigfoot Utica Shale well in Belmont County, will pay $336 million to acquire 12 developed Marcellus Shale wells and 22,000 leasehold acres from Chesapeake Energy.
Rice said the 12 Chesapeake wells are now collectively producing about 20 million cubic feet per day, as seven are operational while five are in some stage of development. He said the company will pay for the acreage via a combination of cash and loans.
Chesapeake spokesman Gordon Pennoyer said the said fits with the Oklahoma City-based driller's new development strategy.
"As we continue to focus on improving our operational efficiencies and selling non-core assets, this transaction aligns with our business strategies of financial discipline and profitable and efficient growth from captured resources," he said.
"This transaction is consistent with our strategy of acquiring high-quality shale assets. We are adding a significant number of drilling locations within an area we have been successfully developing since 2009," Rice said, adding the company is still in the process of increasing its leasehold by 30,000 acres this year.
Over about a one week span in spring 2013, Rice paid about $100 million in lease funds to individual Belmont County mineral owners. The driller continues seeking new leases across the county.