SM Energy Enters into Agreements to Divest of Marcellus Shale Assets
July 18 2011 - 6:40AM
Business Wire
SM Energy Company (NYSE: SM) announces it has entered into
agreements with a subsidiary of Endeavour International Corporation
(NYSE: END) to sell its Marcellus shale assets in McKean and Potter
Counties, Pennsylvania for total cash proceeds of approximately $80
million. The transactions include the Company’s entire leasehold
position in the play of approximately 42,000 net acres as well as
associated pipeline assets. There are currently three (3) producing
wells on the acreage with average first quarter production of 2
MMCFE/d. As of year-end 2010, there were 5.6 BCFE of booked
reserves related to these assets, of which 50% were classified as
proved developed. The effective date of these transactions is April
1, 2011, and closing is expected to occur in the fourth quarter of
2011. The transactions are subject to closing conditions, purchase
price adjustments, and transaction fees.
Tony Best, President and CEO, remarked, “I am pleased to
announce we have reached an agreement to divest our Marcellus shale
position. We continuously look to high-grade our portfolio through
the divestiture of non-core assets, and this transaction is yet
another example of this process. Year to date, we have closed or
entered into transactions in excess of $1 billion that will be used
to fund the development of higher value assets in our portfolio
while preserving the strength of our balance sheet.”
SM Energy was advised by Bank of America Merrill Lynch.
INFORMATION ABOUT FORWARD LOOKING STATEMENTS
This release contains forward looking statements within the
meaning of securities laws, including forecasts and projections.
The words “will,” “believe,” “budget,” “anticipate,” “plan,”
“intend,” “estimate,” “forecast,” and “expect” and similar
expressions are intended to identify forward looking statements.
These statements involve known and unknown risks, which may cause
SM Energy’s actual results to differ materially from results
expressed or implied by the forward looking statements. These risks
include factors such as the uncertainty of negotiations to result
in an agreement or a completed transaction, the uncertain nature of
the expected benefits from the actual or expected acquisition,
divestiture, farm down or joint venture of oil and gas properties,
the uncertain nature of announced divestiture, joint venture, farm
down or similar efforts and the ability to complete such
transactions, the volatility and level of oil, natural gas, and
natural gas liquids prices, uncertainties inherent in projecting
future rates of production from drilling activities and
acquisitions, the imprecise nature of estimating oil and gas
reserves, the availability of additional economically attractive
exploration, development, and property acquisition opportunities
for future growth and any necessary financings, unexpected drilling
conditions and results, unsuccessful exploration and development
drilling, the availability of drilling, completion, and operating
equipment and services, the risks associated with the Company’s
commodity price risk management strategy, uncertainty regarding the
ultimate impact of potentially dilutive securities, and other such
matters discussed in the “Risk Factors” section of SM Energy’s 2010
Annual Report on Form 10-K and subsequent quarterly reports filed
on Form 10-Q. Although SM Energy may from time to time voluntarily
update its prior forward looking statements, it disclaims any
commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy
company engaged in the exploration, exploitation, development,
acquisition, and production of natural gas, natural gas liquids,
and crude oil. SM Energy routinely posts important information
about the Company on its website. For more information about SM
Energy, please visit its website at sm-energy.com.
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