QEP Resources Announces Agreement to Sell Northwest Louisiana Natural Gas Assets for $735.0 Million
November 19 2018 - 6:00AM
QEP Resources, Inc. (NYSE: QEP) (“QEP” or the “Company”) announced
today that its wholly owned subsidiaries, QEP Energy Company, QEP
Marketing Company, and QEP Oil & Gas Company, have entered into
a definitive agreement to sell natural gas and oil producing
properties, undeveloped acreage and associated gas gathering and
treating systems in the Haynesville/Cotton Valley for $735.0
million, subject to purchase price adjustments (the “Divestiture”).
"The sale of our Haynesville/Cotton Valley business is an
important next step in our process of becoming a Permian pure-play
company,” commented Chuck Stanley, Chairman, President and CEO of
QEP. “We intend to use the proceeds from this sale to fund the
ongoing development of our core Permian assets, reduce debt, and
return cash to shareholders through a share repurchase
program."
The agreement provides for the sale of all of QEP’s
Haynesville/Cotton Valley assets in northwest Louisiana to Aethon
III, an affiliate of Aethon Energy, for a purchase price of $735.0
million. As part of this transaction, the buyer has agreed to
assume all firm gas transportation agreements related to these
assets. In addition, QEP will novate natural gas derivative
contracts covering approximately 40 Bcf of gas for the last eleven
months of 2019 to the buyer. The effective date of the transaction
is July 1, 2018, and closing is expected in January 2019. The
transaction is subject to closing conditions, including regulatory
approval.
Latham & Watkins LLP provided legal counsel to QEP. Weil,
Gotshal & Manges LLP and Sidley Austin LLP provided legal
counsel to Aethon Energy.
About QEP Resources
QEP Resources, Inc. (NYSE:QEP) is an independent crude oil and
natural gas exploration and production company with operations in
two regions of the United States: the Southern Region (primarily
Texas and Louisiana) and the Northern Region (primarily North
Dakota). For more information, visit QEP's website at:
www.qepres.com.
About Aethon Energy
Aethon Energy Management LLC is a Dallas-based private
investment firm formed in 1990 that has managed and operated over
$2.5 billion of assets, and is focused on direct investments in
North American onshore oil & gas. Aethon III is an
investment vehicle formed to acquire onshore assets in North
America in partnership with the Ontario Teachers’ Pension Plan and
Redbird Capital Partners. For more information, go to
www.AethonEnergy.com.
Forward-Looking Statements
This release includes forward-looking statements within the
meaning of Section 27(a) of the Securities Act of 1933, as amended,
and Section 21(e) of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such
as “anticipates,” “believes,” “forecasts,” “plans,” “estimates,”
“expects,” “should,” “will” or other similar expressions. Such
statements are based on management’s current expectations,
estimates and projections, which are subject to a wide range of
uncertainties and business risks. These forward-looking statements
include, but are not limited to, statements regarding: the total
consideration to be received by QEP; benefits of the Divestiture,
including the ability to reduce QEP’s indebtedness, fund future
development projects and fund the share repurchase program; QEP
becoming a pure-play Permian company; and the timing of the closing
of the Divestiture. Actual results may differ materially from those
included in the forward-looking statements due to a number of
factors, including, but not limited to: (i) the occurrence of any
event, change or other circumstance that could delay the
transaction or give rise to the termination of the agreement
related thereto; (ii) the outcome of any legal proceedings that may
be instituted against QEP following announcement of the
transaction; (iii) the inability to complete the transaction due to
the failure to satisfy the conditions to closing in the transaction
agreement, including obtaining regulatory approval; (iv) the risk
that the proposed transaction disrupts QEP’s current plans and
operations as a result of the announcement of the transaction,
including the distraction of management and QEP’s employees; (v)
costs related to the transaction; (vi) changes in applicable laws
or regulations; and (vii) the possibility that QEP may be adversely
affected by other economic, business and/or competitive factors;
and the other risks discussed in the Company’s periodic filings
with the Securities and Exchange Commission, including the Risk
Factors section of the Company’s Annual Report on Form 10-K for the
year ended December 31, 2017, and Quarterly Reports on Form 10-Q
filed in 2018. QEP undertakes no obligation to publicly correct or
update the forward-looking statements in this news release, in
other documents, or on the website to reflect future events or
circumstances. All such statements are expressly qualified by this
cautionary statement.
Investor and Media Contact for QEP
William Kent, IRC303-405-6665will.kent@qepres.com
Media Contacts for Aethon Energy
Prosek PartnersNick Rust or Meredith Mitchell 212-279-3115
nrust@prosek.com / mmitchell@prosek.com
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