The assets include over 62,000 acres, including natural gas production in the Marcellus shale formation located in the West Virginia counties of Wetzel, Tyler and Harrison.
The acquisition is expected to close in July this year.
Related: Why China Is Really Dictating the Oil Supply Glut
This gives EQT 31 Marcellus wells and 500 locations for drilling, which will increase its Marcellus shale patch acreage by almost 30 percent.
EQT said it was planning to offer 9.5 million shares of common stock, which will be used to fund the acquisition.
In a conference call with investors and analysts late last week, EQT CEO David Porges said the company was interested in acquisitions, but only for assets that fall within a clearly defined triangle of existing EQT operations in southwestern Pennsylvania.
Related: The Merger That Could Create a New Oil Major
“There are many high-quality asset packages being marketed in our core areas. For the most part, we happen to be focused on transactions that are relatively small in nature … that’s just the nature of what happens to be out there,” Porges said, pointing out the company won’t go on a buying spree because maintaining EQT’s investment-grade rating is important.
The overriding sentiment is that acquiring more nearby acreage could allow shale producers to drill more efficiently using longer horizontal segments of a well.
Related: Oil Prices Edge Lower As OPEC Nears Record Output
Analysts also like this acquisition because EQT already has an extensive network of pipelines in the Marcellus basin, ensuring efficiency in getting product to market.
And now is the time to scoop up this acreage. Low prices and the supply glut is allowing the surviving explorers to get new assets on the cheap.
Rice Energy Inc. said last month that it would buy assets in the Marcellus and Utica basins in Pennsylvania for $200 million from bankrupt coal producer Alpha Natural Resources Inc.
By James Burgess
More Top Reads From Oilprice.com:
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…