Houston-based Magnum Hunter Resources agreed to sell off its Eagle Ford Shale property for $401 million, deciding to focus on its holdings in the Bakken and Marcellus shales, the company said Wednesday.
The deal will turn the 19,000 acres of mineral leases over to Penn Virginia, of Radnor, Pa. The property includes 49 producing wells and 11 others that are recently completed or being drilled now, the company said. Total production averaged 3,000 barrels of oil equivalent per day.
The deal is expected to close in May, the companies said.
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Penn Virginia will have the option to pay fully in cash, or to offer 10 percent of the deal’s value in stock, according to the companies.
Magnum Hunter Resources plans to use proceeds from the sale to pay off some of its debt and free up its credit lines for other uses.
“We believe this sale to Penn Virginia fits their existing asset base, which is located adjacent to these properties, and future drilling plans in the Eagle Ford Shale very well,” Gary C. Evans, CEO of Magnum Hunter Resources, said in a statement. “It has always been our belief that as the various shale plays mature, building scale is extremely important for achieving long term economic value and that is what is being accomplished today.”