From Hess Corp. today:
Hess Corporation Announces Sale of Utica Dry Gas Acreage
NEW YORK--(BUSINESS WIRE)--Jan. 29, 2014-- Hess Corporation (NYSE: HES) announced today that it has entered into an agreement to sell approximately 74,000 acres of its dry gas acreage in the Utica Shale to an undisclosed third party for a consideration of $924 million. Approximately two-thirds of these proceeds are expected at the end of the first quarter of this year, with the balance to be received in the third quarter.
Proceeds from these sales will be used for additional share repurchases as they are in excess of those associated with the divestiture program announced by the Company on March 4 of last year. The Company will determine whether or not to seek an increase to its existing $4 billion share repurchase authorization, approved as part of its March 4 announcement, after a final decision is made either to spin or sell Hess Retail.
John B. Hess, Chief Executive Officer of Hess, said, “The sale of our Utica dry gas acreage is an example of our continued commitment to grow shareholder value through ongoing portfolio reshaping. While our wells in the dry gas portion of the Utica were highly productive, we concluded that the potential returns from such an investment, at current and projected natural gas prices, no longer justified retaining this acreage as a strategic part of our overall liquids-based asset portfolio.”
Hess had 12 Utica wells that were in production in 2013 and 34 other Utica wells that were being developed. The wells were in Harrison, Belmont, Guernsey and Jefferson counties.
The company also has six Marcellus shale permits in Ohio: two are producing, a third is drilled and the three others are permitted only.
The company is also a partner in an Ohio joint venture with Pennsylvania-based CONSOL Energy.
Earlier this month, Hess said it plans to spend $550 million in 2014 to drill 35 wells in the Utica shale’s wet gas window in eastern Ohio.