Chevron has been trying to unload its Appalachian gas holdings since late 2019, when it recorded an $11 billion write-down for that asset and others amid a swelling domestic gas glut and cratering prices for the furnace and power-plant fuel. The acquisition is the latest in a string of recent deals where shale drillers are seeking to add scale to cope with a plunge in commodity prices that has left much of the industry unprofitable. EQT Corp. agreed to buy Chevron Corp.’s Appalachian shale assets for $735 million as the biggest producer of U.S. natural gas takes advantage of an industry slump to expand. The acquisition is the latest in a string of recent deals where shale drillers are seeking to add scale to cope with a plunge in commodity prices that has left much of the industry unprofitable.
Chevron assets include about 100 work-in-progress wells, with a net production capacity of 450 million cubic feet a day, EQT said. It will also give the shale explorer a 31% ownership interest in pipeline company Laurel Mountain Midstream. EQT indicated it may fund the deal with cash on hand, a revolving credit facility or a separately disclosed issuance of up to 23 million common shares. EQT fell in after-hours trading, dropping 3% to $15.67 at 7:59 p.m. in New York. Chevron fell 0.6%. EQT has also made a proposal to acquire rival CNX Resources Corp., people familiar with the matter told Bloomberg News last week. No final decision had been made and EQT could opt to not proceed with a potential deal