Yesterday, U.S. oil and gas exploration firm Endeavour International Corp announced they were bailing out of a deal to buy the Marcellus holdings of SM Energy (no stated reason for abandoning the deal). This was the single-sentence press release they issued:
Endeavour International Corporation announced today that it has terminated purchase and sale agreements with SM Energy Company and certain other minority owners to acquire leasehold, producing interests, a pipeline and related facilities in the Marcellus Shale in north central Pennsylvania.(1)
A few hours later, an angry SM Energy responded with this press statement:
SM Energy Company today announces its dispute with Endeavor International Corporation over the closing of its previously announced sale of Marcellus Shale assets. Earlier today, Endeavour announced that it had "terminated" purchase and sale agreements between SM Energy, SM Energy’s partners and a subsidiary of Endeavour related to oil and gas assets in the Marcellus Shale in Pennsylvania. SM Energy disputes Endeavour’s ability to terminate the Agreements and is disappointed with its actions and announcement. The Company and its partners intend to pursue any and all legal remedies arising from Endeavour’s actions. Regardless of the outcome of the aforementioned dispute, SM Energy does not expect to make any capital expenditures related to its Marcellus Shale assets in 2012 and is not required to make such expenditures to maintain substantially all of its acreage position.(2)
Looks like there’s litigation ahead for this one.
(1) Endeavour International Press Release (Dec 14, 2011) – Endeavour Terminates Acquisition of Pennsylvania Marcellus Shale Assets
(2) SM Energy Press Release (Dec 14, 2011) – SM Energy Announces Dispute with Endeavour over Closing of Marcellus Assets Sale