Noble Energy sells off Marcellus gas assets for $1.2 billion

Noble Energy has struck a deal to sell off its assets in the natural gas-rich Marcellus Basin in the northeastern United States for $1.2 billion.

It didn’t name the buyer in its statement on Tuesday. The Houston company said $100 million of the $1.2 billion price tag will come from three equal contingent payments that depend on regional natural gas prices rising above a certain level over the next few years. The other $1.1 billion is cash.

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Noble said it’s selling assets that produce 415 million cubic feet of natural gas equivalent a day across 385,000 acres in northern West Virginia and southern Pennsylvania. About 88 percent of that production is gas, rather than oil or liquids. It had some proved reserves of 1.5 trillion cubic feet of natural gas equivalent.

(AHIKAM SERI/AFP/Getty Images)

The Marcellus Shale is still the biggest shale gas play in the nation, and it soaked up the lion’s share of the oil industry’s early investments in shale gas. When natural gas prices tanked half a decade ago, shale drillers began looking for unconventional oil in places like the Eagle Ford Shale in South Texas, and another boom began.

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Noble’s deal is set to close by the end of the second quarter. The company plans to pay off the debt it took on when it bought Clayton Williams Energy, which shifted the company’s center of gravity toward the Delaware Basin in West Texas.

In a statement Tuesday, Noble CEO David Stover said the Marcellus has performed well in recent years but that the company has turned its focus to more lucrative oil plays.

Texas has long been at the center of the American energy industry.

Take a look at some of the biggest oilfield finds in the state’s history in the gallery above.