Diversified Gas & Oil buys EQT assets in the region
An Alabama-based oil and gas company bought a swath of EQT assets in the southern half of West Virginia, along with other spots in Appalachia, earlier this month.
The $575 million deal between Diversified Gas & Oil and drilling company EQT closed July 18, with Diversified assuming the operations of more than 11,000 EQT wells in West Virginia, Kentucky and Virginia. Diversified also acquired more than 6,400 miles of gathering pipe and 59 compressor stations.
According to a Diversified spokeswoman, wells from Lewis and Barbour counties in north-central West Virginia down to its southern border have been acquired by the company in the deal. The Pittsburgh-based EQT, though, says it “will retain the deep drilling rights across the acreage,” which amounts to roughly 2.5 million acres total.
The deal doubles Diversified’s production to more than 60,000 barrels of oil per day, “firmly establishing Diversified as the largest conventional producer in the Appalachian region,” the company said in a news release.
The wells sold have a current net production of roughly 200 million cubic feet of natural gas equivalents daily, according to EQT.
EQT is the largest natural gas producer in the U.S. with a heavy presence in Appalachia’s Marcellus Shale region. EQT is also heading the construction of the controversial Mountain Valley Pipeline project, and a paid member of the company’s board, Bray Cary, serves as a paid senior adviser for Gov. Jim Justice.
Diversified, too, has a presence in northern West Virginia and parts of Ohio and Pennsylvania.
Diversified CEO Rusty Hutson said in a statement that the deal delivers “results that benefit our shareholders, and represents a significant milestone in the evolution of our clearly stated strategy.”
EQT, meanwhile, said the sale will help reduce its debt.
The deal provides Diversified with more than 915,000 net lease and deed acres in West Virginia, according to a Diversified presentation. Most of the wells are in Kentucky, but West Virginia features more than 4,500 wells, according to the presentation.
The 250-plus employees involved in the operation of those assets will be retained by Diversified, the company said.
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