EQT’s Toby Rice Discusses Chevron Deal, Ponders Pipe Assets

Yesterday Pittsburgh Business Times‘ ace reporter Paul Gough got EQT CEO Toby Rice to open up and talk about the company’s recently announced deal to buy Chevron’s considerable Marcellus/Utica assets (see EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock). Rice said the Chevron deal fits like a glove and investors will love it. He offered some insight into the bidding process and his thoughts on the pipeline assets that are part of the deal.
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After Floating $350M in New Stock, EQT Floats $350M in New Bonds

Last week EQT Corporation announced a deal to buy Chevron’s considerable Marcellus/Utica assets (land and wells) for the lowball price of $735 million (see EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock). EQT also announced, on the same day, they are floating up to 23 million new shares of company stock to help pay the purchase price, hoping to raise ~$350 million. On Friday EQT announced it will float new bonds (debt) to raise another $350 million, also meant to help pay for the Chevron purchase.
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EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock

Looks like the rumors were true, at least one of them. Yesterday EQT announced it has cut a deal to buy Chevron’s considerable Appalachian assets for $735 million. The Reuters rumor from September said EQT had offered $750 million (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Also yesterday, EQT floated up to 23 million new shares of stock, on offer for $15.50 per share, attempting to raise ~$350 million to use toward the Chevron purchase.
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What EQT Purchase of Chevron’s M-U Assets Means, IF it Happens

Nearly a month ago sources talking to Reuters let it slip that EQT has offered $750 million for Chevron’s $6.5 billion worth of Marcellus/Utica assets (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Since that time we’ve not heard a peep about negotiations and whether or not Chevron is seriously considering the offer. Let’s do a little speculating. What if Chevron does accept that offer? What does it mean for investors and others with a stake in the outcome?
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 28 – Oct 2

Somebody lit a fire under drillers in Pennsylvania last week! Or maybe we should say a fire was lit under the PA Dept. of Environmental Protection (DEP). PA issued 35 new permits last week spread pretty much across the entire state–in the northeast, central, and southwest portions of the state. Ohio, once again, issued no new Utica permits last week. West Virginia issued a single new permit last week.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 14-18

Last week Ohio finally broke the drought of not issuing permits for new shale wells in the Buckeye State. Finally! Last week Pennsylvania issued 13 new permits for wells on three well pads. Ohio issued 4 new permits for wells on two well pads. And West Virginia issued 1 new permit.
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Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets

Last December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from its Marcellus/Utica assets. Also in December, the company posted for sale ALL of their M-U assets (see Chevron Confirms M-U Assets for Sale, Asks Vendors to Avoid Media). In February Chevron hired investment bank Barclays to help shop their M-U assets with the bids due in August (see Bids for Chevron’s 550K M-U Acres & 500 Wells Due in Mid-August). “Sources” talking to Reuters have let it leak that EQT has offered $750 million for Chevron’s $6.5 billion worth of assets.
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Pin Oak Buys Laurel Mountain Pipe System from Williams/Chevron

Pin Oak Midstream, a subsidiary of Pin Oak Energy Partners, a relatively young Marcellus/Utica driller based in Akron, OH, has purchased most of the pipeline assets of Laurel Mountain Midstream for an undisclosed amount. The assets include 1,050 miles of natural gas-gathering pipelines and five compressor stations located in three Pennsylvania counties.
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Chevron Buying Noble Energy in Deal Worth $13 Billion

Last year Chevron tried to buy Permian driller Anadarko Petroleum for $50 billion. Occidental Petroleum swooped in at the last minute and lured Anadarko away in a $57 billion deal. Chevron left the marriage altar with a cool $1 billion in breakup fees (see Chevron Leaves the Altar with $1B, Waves Goodbye to Anadarko). Chevron is now glad they got jilted because they’ve just brokered a new deal–to buy Noble Energy for $5 billion in stock and assumption of $8 billion in debt for a grand total of $13 billion. It’s a far lower amount and much more bang for the buck.
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Bids for Chevron’s 550K M-U Acres & 500 Wells Due in Mid-August

Last December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from its Marcellus/Utica assets. Also in December, the company posted for sale ALL of their M-U assets (see Chevron Confirms M-U Assets for Sale, Asks Vendors to Avoid Media). Just sticking a “for sale by owner” sign on more than a half-million acres of leases and over 500 wells didn’t work, so in February Chevron hired investment bank Barclays to help shop their M-U assets (see Chevron Hires Barclays to Help Sell Its Marcellus/Utica Assets).
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Chevron Dumping Pittsburgh Office Space – 90,000 Sq Ft for Lease

Last December Chevron announced it was writing down the value of its Marcellus/Utica assets and putting those assets up for sale (see Chevron Writes Down $5B+ in Marc/Utica Assets, Looks to Sell All). Prior to the pandemic lockdown, Chevron said it would begin cutting 320 jobs in the M-U beginning in early April (see Chevron Cutting 320 Jobs in Marcellus/Utica Beginning April 6th). The cuts continued in May with another 80 employees getting a pink slip (see Chevron Cuts Another 80 Jobs in M-U; Still Looking for Buyer). It shouldn’t come as a surprise with all the layoffs that Chevron is now advertising most of their Pittsburgh HQ office space for sublease.
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Chevron Cuts Another 80 Jobs in M-U; Still Looking for Buyer

Last December Chevron announced it was writing down the value of its Marcellus/Utica assets and putting those assets up for sale (see Chevron Writes Down $5B+ in Marc/Utica Assets, Looks to Sell All). Prior to the pandemic lockdown, Chevron said it would begin cutting 320 jobs in the M-U beginning early April (see Chevron Cutting 320 Jobs in Marcellus/Utica Beginning April 6th). The cuts continue with another 80 employees getting a pink slip this week.
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Marcellus Companies $tep Up to Help During COVID-19 Crisis

Companies in the Marcellus/Utica shale industry have stepped up and given money, and in some cases retooled manufacturing operations, in order to help communities, first responders and medical professionals respond to the COVID-19 coronavirus pandemic. Companies like ExxonMobil, Range Resources, Cabot Oil & Gas, EQT, Alta Resources, Chevron, Greylock Energy, Olympus Energy, Penn E&R, Southwestern Energy and others. We are gratified and proud of the industry where we hang our hat.
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Chevron Tries to Make Room for M-U Workers with Buyout Offers

Last week MDN brought you the news that Chevron will begin to trim 320 jobs in the Marcellus/Utica beginning in early April (see Chevron Cutting 320 Jobs in Marcellus/Utica Beginning April 6th). The Chevron job cuts should not be a surprise, given the company is selling all of its M-U assets (see Chevron Writes Down $5B+ in Marc/Utica Assets, Looks to Sell All). From the beginning of the M-U exit process, Chevron has made it plain it hopes to transfer at least some of the M-U positions to other regions/areas of the company. We now have more insight as to how that may happen.
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Chevron Cutting 320 Jobs in Marcellus/Utica Beginning April 6th

By the end of this year, Chevron will have eliminated 320 jobs in its Marcellus/Utica operation. Some 288 of those positions will be gone from the company’s regional headquarters in Moon Township (Allegheny County, PA), and another 32 will be gone from the company’s Mount Braddock location (Fayette County, PA). The company says it will try to find new assignments for as many people as possible. The layoffs begin on April 6.
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Chevron Hires Barclays to Help Sell Its Marcellus/Utica Assets

In December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from their Marcellus/Utica assets (see Chevron Writes Down $5B+ in Marc/Utica Assets, Looks to Sell All). In addition, the company announced it is putting all of its M-U assets up for sale (see Chevron Confirms M-U Assets for Sale, Asks Vendors to Avoid Media). Just sticking a “for sale by owner” sign on more than a half-million acres of leases and over 500 wells doesn’t appear to be working. So Chevron has hired investment bank Barclays to help shop their M-U assets.
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