SM Energy and Endeavor International reach a deal for SM's Marcellus Shale acreage. The company is selling approximately 42,000 acres for $80 million. This is the latest in a series divestitures that will help the company finance its operations in the Eagle Ford Shale. The Eagle Ford Shale alone has the potential to double SM Energy's production over the next few years.
"SM Energy Company (NYSE: SM) announces it has entered into agreements with a subsidiary of Endeavour International Corporation (NYSE: END) to sell its Marcellus shale assets in McKean and Potter Counties, Pennsylvania for total cash proceeds of approximately $80 million. The transactions include the Company's entire leasehold position in the play of approximately 42,000 net acres as well as associated pipeline assets.
There are currently three (3) producing wells on the acreage with average first quarter production of 2 MMCFE/d. As of year-end 2010, there were 5.6 BCFE of booked reserves related to these assets, of which 50% were classified as proved developed. The effective date of these transactions is April 1, 2011, and closing is expected to occur in the fourth quarter of 2011."
Read the full press release at SM-Energy.com