Hess buys more Utica Shale acreage for $750 million
Gas Daily (09-Sep-11)
http://www.plattsenergyweektv.com/story.aspx?storyid=166351&catid=293
Hess Corporation has bought privately held Marquette Exploration and other leases in Ohio's Utica Shale for $750 million, boosting its holdings in the play by 85,000 net acres, the company said Thursday.
The announcement comes a day after Hess said it had entered into a 50-50 joint venture with Pittsburgh-based Consol Energy to develop nearly 200,000 acres in the Utica in a deal valued at $593 million.
While the Consol deal had an acreage valuation of some $5,930/acre, the Thursday agreement ups that price tag to about $8,800/acre.
Hess said the leases acquired in the latest deal are in Jefferson, Harrison and Belmont counties. Appraisal activities on this acreage are planned to start in the fourth quarter.
The company offered no description of Marquette Exploration, and that company's website was inaccessible. The firm is listed as being headquartered just outside of Houston in Spring, Texas.
"With these transactions, we have built a strategic acreage position in the Utica Shale, allowing us to strengthen our portfolio of unconventional resources in high-quality assets, leverage our operating expertise and create significant potential for future growth in reserves and production," CEO John Hess said in a statement.
He elaborated on the importance of both Utica deals, telling analysts at the 2011 Barclays CEO Energy-Power Conference that he expects the acquisitions to have an impact similar to the company's high-potential Bakken Shale oil operations in North Dakota.
"The Utica has the potential to provide growth and production reserves comparable to what we have in the Bakken," Hess told the conference. With the addition of the Utica acreage to its positions in the Bakken and the Eagle Ford Shale of South Texas, Hess said the company now expects unconventional resources to contribute 40% to 50% of its reserves growth into 2015, up from a previous projection of just 20%.
"The company has made some strategic changes here," he said. "Unconventionals will be a meaningful piece of Hess."
Hess' stock closed up 66 cents, or 1.11%, at $59.92/share Thursday.
Jeff Barber,Gary Taylor
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