EQT Corp To Buy 58,000 Net Acres In Marcellus Shale

Natural-gas producer EQT Corp. (EQT) said Tuesday that the company will acquire 58,000 net acres in Appalachia's Marcellus Shale for $280 million in stock and cash from a group of private operators and landowners.

Technological advances over the past few years have made it financially viable for energy companies to drill for gas in hard-to-reach shale-rock formations like the Marcellus. Companies like Japan's Mitsui & Co. Ltd (MITSY), which agreed last month to purchase a 32.5% interest in Anadarko Petroleum Corp.'s (APC) Marcellus assets for $1.4 billion, have flocked to the area.

The acreage EQT will buy is located mostly in Cameron, Clearfield, Elk and Jefferson counties in Pennsylvania. The purchase includes a 200-mile gas-gathering system and about 100 producing vertical wells. EQT didn't disclose the sellers' names.

"We are pleased to add to our substantial, firmly held acreage position in the heart of the Marcellus fairway," said Murry Gerber, EQT's chairman and chief executive, in a prepared statement. "We have extensive midstream assets and firm contracts to gather and transport natural gas to lucrative eastern markets."

Pittsburgh-based EQT said it expects the transaction to close by April 30.

EQT also provided an update Tuesday on the company's existing Marcellus wells. The company increased its estimated ultimate recovery of gas for each well from between 3.5 billion to 4 billion cubic feet equivalent to between 4 bcfe and 4.5 bcfe, at an average cost of $3 million per well.

The 30-day average initial production rate for the seven wells EQT completed in 2010 was 7 million cubic feet equivalent a day, with one well in Green County, Pa. producing 15.8 MMcfe/d.

EQT shares were recently up 44 cents, or 0.98%, at $45.36 a share.

-By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com

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