Cabot Oil & Gas Corp. has reached an agreement to sell its operated and non-operated Eagle Ford Shale assets to an affiliate of Venado Oil & Gas for $765 million.
The divestiture includes approximately 74,500 net acres (approximately 65,100 operated and approximately 9,400 non-operated) of Eagle Ford Shale leasehold primarily located in Frio and Atascosa counties.
Production from these properties during the third quarter of 2017 was 15,656 barrels of oil equivalent per day.
The transaction is expected to close during the first quarter of 2018, subject to customary closing conditions and adjustments.
Separately, the company announced the sale of its remaining East Texas assets to an undisclosed buyer. This transaction is expected to close on or before July 1, 2018, subject to customary closing conditions and adjustments.
Cash proceeds from these transactions, in addition to the company's current cash position and its outlook for significant free cash flow generation during its three-year plan through 2020, are expected to allow Cabot to continue to enhance shareholder value by:
- Delivering double-digit growth per debt-adjusted share from its Marcellus Shale position;
- Providing sustainable dividend growth;
- Enhancing its share repurchase program;
- Further strengthening its balance sheet; and
- Funding any potential increases in future activity in its ongoing exploratory programs, depending on the outcome of initial testing efforts in these areas during the first half of 2018.
