WPX Energy announces $300 million deal with Southwestern Energy

A rig drills for natural gas in Pennsylvania's Marcellus Shale. WPX Energy signed a $300 million deal to sell a portion of its holdings in Pennsylvania. (Photo by Edward DeCroce)
A rig drills for natural gas in Pennsylvania's Marcellus Shale. WPX Energy signed a $300 million deal to sell a portion of its holdings in Pennsylvania. (Photo by Edward DeCroce) | WPX Energy

WPX Energy and Southwestern Energy Co. agreed Tuesday to allow Southwestern to take over WPX's operations in northeast Pennsylvania for approximately $300 million.

The agreement also releases certain firm transportation capacity to Southwestern.

“The transformation of our company continues as we execute our strategy,” WPX President and CEO Rick Muncrief said. “We’re heading into 2015 reshaped, refocused and ready to grow margins, develop our highest returning assets and build the long-term value of the company.”

The transaction includes about 63 horizontal wells, 46,700 net acres of physical operations and about 50 million cubic feet of natural gas production per day.

Southwestern will also take on WPX's contract with Millennium Pipeline, which includes about 260 million cubic feet per day of transportation capacity. The deal will clear about $24 million per year of annual demand obligations for WPX.

WPX has made six agreements with different companies since May in order to narrow its business focus. The company also recently announced a new five-year, $1.5 billion unsecured credit facility.

The companies expect to finalize the deal in the first quarter of 2015 depending on regulatory approval and closing conditions.

WPX is also expected to sell off operations in Westmoreland County in southwestern Pennsylvania and transport capacity with Transco's Northeast Supply Link line.