Norway’s Equinor has signed an agreement with EQT Corporation to acquire nonoperated interests in the northern Marcellus formation in the US for $1.25 billion.
Under the agreement, Equinor is acquiring 100% of EQT’s remaining working interest in northern Marcellus gas units primarily operated by Expand Energy.
The transaction follows an April 2024 deal where the pair agreed to swap Equinor’s operated position in the Marcellus and Utica shales in Ohio for a stake in EQT’s nonoperated interests in the northern Marcellus. The new acquisition covers the same acreage included in the swap agreement. Subject to closing, the new acquisition will have economic effect from 31 December 2024.
With this transaction, Equinor is increasing its average working interest in the northern Marcellus asset from 25.7% to 40.7%. The transaction adds approximately 80,000 BOED to Equinor’s US production in the near-term.
“We continue to high-grade Equinor’s international portfolio in line with our strategy, improving robustness by adding more natural gas volumes in a core market where we produce with low break-evens and low-intensity upstream emissions,” says Philippe Mathieu, executive vice president for exploration and production international at Equinor. “We are well positioned in this premium acreage to capitalize on positive long-term demand indicators in the US gas market.”
Equinor’s E&P USA business has delivered over $5.5 billion in adjusted operating income after tax since the start of 2021.
“The US is a core country for Equinor, where we have shaped a robust onshore and offshore oil and gas portfolio, alongside our activities in offshore wind, battery storage, and low-carbon value chains,” added Mathieu.
EQT Corporation is one of the largest producers of natural gas in the US with operations in Pennsylvania, West Virginia, and Ohio.
Closing of the transaction will, among other things, be dependent on approval by relevant authorities.
As part of the April deal, Equinor sold 100% interest in and operatorship of its onshore asset in the Appalachian Basin, located in southeastern Ohio, in exchange for 40% of EQT’s nonoperated working interest in the northern Marcellus shale formation in Pennsylvania for $500 million.
Following that transaction, Equinor will increase its average working interest from 15.7% to 25.7% in certain Chesapeake-operated northern Marcellus gas units. To cover pre-existing gas sales commitments, Equinor entered into a gas buy-back agreement with EQT.
Prior to this transaction, the Appalachian Basin operated position was the last remaining operatorship held by Equinor in the US onshore.
Early in 2024, operators including EQT had deferred natural gas production from the region due to unfavorable economic conditions. By summer, some of that deferred gas was coming back online as conditions improved and regional gas prices jumped from around $1.50 to near $3.00/MMBtu.
The US Energy Information Administration said recently that annual US shale gas production could decline for the first time since 2000. Declines in the Haynesville and Utica are driving the trend. Production in the Marcellus play, the top US natural gas producing area, remained flat.
