Chief Oil & Gas Announces Agreement to Sell a Portion of its Marcellus Shale Assets
DALLAS (December 21, 2010) – Chief Oil & Gas LLC (“Chief”) and Radler 2000 Limited Partnership (“Radler”) today announced they have entered into an asset purchase and sale agreement to sell certain natural gas properties in the Marcellus Shale to EXCO Holding PA, a subsidiary of EXCO Resources, Inc., for approximately $459 million. The sale assets include 15 producing wells, 11 wells waiting on completion and approximately 50,000 net acres located primarily in Lycoming, Sullivan and Columbia counties in Pennsylvania.
“We are pleased to enter into this transaction with EXCO, which previously joined with BG Group, plc in a joint venture to develop its Marcellus holdings,” said Chief’s President and CEO, Trevor Rees-Jones. “After the sale of these properties, Chief and Radler will continue to own over 287,000 net acres of Marcellus leasehold in a gross position covering approximately 500,000 acres, and we are enthusiastic about continuing to drill and develop our acreage in this world-class shale play. We believe this position holds substantial natural gas reserves, which can only grow in desirability as our nation turns to readily-accessible, abundant and clean-burning natural gas as the primary fuel of the future to grow our economy and support our nation’s security, employment and standard of living,” said Rees-Jones.
“Chief employees and Chief offices in Wexford and Williamsport, Pennsylvania will not be affected by the sale. Chief’s midstream subsidiary, Chief Gathering, will also not be affected and will continue to develop its planned pipeline infrastructure in Pennsylvania. The proceeds from this sale will allow Chief to expand its development efforts in northeast and southwest Pennsylvania, West Virginia and Maryland,” Rees-Jones continued.
Chief Oil & Gas has drilled 95 wells in the Marcellus Shale in Pennsylvania and West Virginia and will remain one of the largest leaseholders and most active operators in the Marcellus Shale. Chief plans to exit 2010 as operator of 9 rigs drilling in the Marcellus, not counting non-operated interests owned in leases and units being drilled by multiple rigs operated by others.
Mark Deverka / Bank of America Merrill Lynch represented Chief and Radler in this transaction.
About Chief Oil & Gas
Based in Dallas, Texas, Chief Oil & Gas is a privately held, independent oil & gas company engaged in the exploration, development and production of oil and natural gas throughout the continental United States. For more information, visit www.chiefog.com.