QEP Resources’ wholly owned subsidiaries have signed a $735m agreement to sell oil and gas assets in the Haynesville/Cotton Valley in northwest Louisiana, US, to private investment firm Aethon Energy’s affiliate Aethon III.
QEP noted that the agreement signed by QEP Energy Company, QEP Marketing Company, and QEP Oil & Gas Company is part of its efforts to become a Permian pure-play company.
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The sale will include producing assets, undeveloped acreage, and associated gas gathering and treating systems.
Pursuant to the agreement, Aethon III will also assume all firm gas transportation agreements related to the assets.
QEP Resources chairman, president and CEO Chuck Stanley said: “The sale of our Haynesville/Cotton Valley business is an important next step in our process of becoming a Permian pure-play company.
“We intend to use the proceeds from this sale to fund the ongoing development of our core Permian assets, reduce debt, and return cash to shareholders through a share repurchase programme.”
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By GlobalDataThe agreement also involves novation of natural gas derivative contracts covering around 40Bcf of gas for the last 11 months of next year to the buyer.
Subject to certain closing conditions, including receipt of regulatory approval, the completion of the transaction is anticipated to take place in January 2019.
Latham & Watkins served as legal adviser to QEP for the transaction.
QEP’s operations are located in the Southern Region covering Texas and Louisiana, as well as the Northern Region covering North Dakota.
The current agreement comes after a series of divestments made by the company.
Previous asset sales include the transaction to sell natural gas assets in south-west Wyoming to Pinedale Energy Partners, and non-core assets in the Midcontinent Region and the Williston Basin through three separate deals.
