EQT offered $750 million for the properties, one of the people
familiar with the matter said.
Chevron last year said it was considering sale of the properties
and took an $8.17 billion charge to earnings to write down their
value and an unrelated U.S. offshore project. Most of the
impairment charge was for the gas properties.
Chevron is marketing about 800,000 acres in the Marcellus and
Utica shale basins of Pennsylvania and neighboring states and a
31% non-operating interest in Laurel Mountain Midstream, which
has intrastate and gathering lines servicing the Marcellus shale
area.
EQT declined to comment. EQT Chief Executive Toby Rice in July
described Appalachia shale as "a buyer's market," and called
consolidation an opportunity for the Pittsburgh-based company.
Bids for the properties were received on Aug. 12 and are being
evaluated, Chevron said in response to inquiries. It declined to
comment on the bids.
There is no guarantee the talks will lead to a sale to EQT or
another company.
The shale assets are from Chevron's purchase of producer Atlas
Energy for $4.3 billion including debt in 2010, a time when
shale gas fields were selling at large premiums. A year earlier,
Exxon Mobil Corp. <XOM.N> agreed to pay $30 billion for XTO
Energy, then a large Appalachian shale basin operator.
The deals soured for both companies. In addition to Chevron's
writedown, Exxon later took a $2 billion writedown on the value
of its natural gas assets.
U.S. natural gas futures <NGc1> are trading at about $2.27 a
million British Thermal Units (BTUs) and have languished well
below their peak 12 years ago when gas traded as high as $12.78
per million British Thermal Units.
The Appalachian assets last year produced 262 million cubic feet
of natural gas, on a net daily basis. EQT had average daily
sales volumes of about 4.1 billion cubic feet equivalent.
(Reporting by Shariq Khan and Arathy S Nair in Bengaluru;
Jessica Resnick-Ault and David French in New York; Editing by
Cynthia Osterman)
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