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WPX Energy Continues to Monetize Marcellus Shale Holdings

Source: www.gulfoilandgas.com 5/4/2015, Location: North America

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WPX Energy signed an agreement to sell a package of Marcellus Shale marketing contracts and release certain related firm transportation capacity to an undisclosed buyer for in excess of $200 million cash.

The sale includes various long-term natural gas purchase and sales agreements, along with 135 million Btu per day of firm transportation capacity on Transco’s Northeast Supply Link project. This is WPX’s second transaction monetizing its holdings in the Marcellus Shale. Earlier this year, WPX completed a $300 million sale of its Northeast Pennsylvania assets.

“Unwinding noncore positions in an attractive fashion increases our financial flexibility and is further proof of our solid execution,” said Rick Muncrief, president and chief executive officer. “Our team continues to be opportunistic, build our balance sheet strength and act quickly, decisively and creatively,” Muncrief added.

The parties expect to close the transaction in the second quarter, subject to regulatory approval and typical closing conditions. Upon completing the transaction, WPX will be released from various long-term natural gas purchase and sales obligations and approximately $390 million in future demand payment obligations associated with the transport position.

WPX’s only remaining assets in the Marcellus Shale primarily consist of its physical operations in Westmoreland County in southwestern Pennsylvania. These assets remain targeted for divestiture.

Over the past year, WPX has initiated more than $1 billion in transactions to reshape the company’s holdings and further strengthen its balance sheet.

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