Antero Resources of Denver agreed to sell all of its natural gas and pipeline assets in the Piceance basin to a private company for $325 million in cash plus the assumption of all of Antero’s Rocky Mountain firm transportation obligations. The buyer was not identified.
Closing, subject to customary closing conditions, is expected in December with an effective date of Oct. 1. The transaction does not include Antero’s 78 bcf of natural gas hedges through 2016.
Terms include firm transportation obligations through 2021 that have an undiscounted liability of $91 million based on the difference between the pricing upgrade that can be obtained in the futures market at the tailgate of the pipelines and the fixed fee pipeline tariffs.
Assuming the current monetization of Antero’s Rockies gas hedges, the total Piceance proceeds will include $325 million for the upstream and pipeline assets before customary post-closing adjustments.
The transaction will be used to repay debt, Antero said.
The assets consist of 61,000 net acres of leasehold and 30 miles of gathering pipeline in western Colorado. The assets contain an estimated 205 bcf of gas equivalent of proved developed reserves as of Sept. 30 and 59 MMcfd net production from 284 gross operated wells.
Paul M. Rady, Antero chairman and chief executive officer, said, “The Piceance asset sale allows Antero to redeploy capital and human resources to its Marcellus and Utica Shale projects where we are focused on the development of liquids-rich natural gas and oil reserves.”
With the closing of the Piceance transaction, and the company’s exit from Arkoma basin earlier in 2012, Antero will complete its transformation into “a pure-play Appalachian basin shale producer,” Rady said.