Hess, CNX to sell JV assets in the Utica

Hess Corp. and CNX Resources Corp., Pittsburgh, will sell their 50-50 Ohio Utica joint venture assets to Ascent Resources-Utica LLC for net cash consideration of $400 million to each party.

The assets, in the wet gas areas of Belmont, Guernsey, Harrison, and Noble counties, consist of 39,000 net acres including 26,000 net undeveloped acres.

For full year 2018, net production is forecast to average 14,000 boe/d from 50 net producing wells, of which 70% is expected to be residue gas, Hess said. The top hole has been drilled in 2 wells, and aside from 5 recently completed wells expected to be turn-in-line in July, said CNX, future activity on the assets was not in its 5-year plan. The acres sold were not dedicated to CNX Midstream Partners LP, the company said, and do not impact future dropdown opportunities.

CNX expects to use cash proceeds from the sale to pay down debt, continue its ongoing share repurchase program, invest in ongoing activities in Appalachia, or make bolt-on acreage acquisitions.

Hess plans to use proceeds to invest in higher return growth opportunities in Guyana and the Bakken and to fund its share repurchase program, said Chief Executive Officer John Hess (OGJ Online, Jan. 31, 2018). The company will continue to look for options for its 61.5% operated interest in South Arne field as an announced sale process for the Denmark asset did not meet expectations.

Closing of the Utica JV assets sale is expected by the end of this year’s third quarter, subject to closing conditions and adjustments.

Contact Mikaila Adams at [email protected].