EQT sells Appalachian Basin assets to Diversified
Friday, May 29, 2020
EQT recently closed on the $125 sale of non-core assets in the Appalachian Basin to Diversified Gas and Oil PLC, according to Kallanish Energy.
The deal includes potential contingent considerations of up to an additional $20 million, based on future commodity prices. It also relieves EQT of about $47 million in asset retirement obligations and other liabilities associated with the assets.
EQT has used proceeds from the sale to pay down its term loan due in 2021.
The Pennsylvania assets included in the sale were 80 Marcellus Shale wells with total current net production of 55 MMcfe per day and 33 miles of gathering lines. The West Virginia assets included in the sale were 809 conventional wells with total net production of about 3 MMcfe per day and 154 miles of gas gathering lines.
Learn more: Kallanish Energy > EQT closes on sale of Appalachian Basin assets
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What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.