Montage Resources Corp. entered a non-binding letter of intent with an undisclosed international third-party to sell its non-core wellhead gas and liquids gathering infrastructure in the Ohio Utica condensate development area for $25 million. The deal is expected to close in this year’s fourth quarter.
The company expects its second-quarter production to be near the high end of previous guidance of 535-555 MMcfe/d. Second quarter production includes the impact of the previously reported curtailments. Substantially all production was returned to sales by June 1.
Citing efficiency gains, cost reductions, shortened cycle times and ongoing well outperformance, the company is lowering its full-year 2020 capital expenditure guidance to $120-140 million from $130-150 million, with no projected impact on full-year 2020 production. In June, the company increased its full year production guidance to 565–585 MMcfe/d (OGJ Online, June 2, 2020).
Completion of the infrastructure sale is subject to, among other items, completion of due diligence, execution of definitive documentation, and satisfaction of conditions.
Second quarter financial and operational results will be released after the market close on Aug. 6.
Montage Resources was created from the 2019 closing of a deal to combine Eclipse Resources Corp., State College, Pa., and Blue Ridge Mountain Resources Inc., Irving, Tex. (OGJ Online, Mar. 1, 2019).