EQT to Plow Pipeline Sale Proceeds into Marcellus, Huron Wells
EQT Corp. on Wednesday announced the sale of the Big Sandy Pipeline to Spectra Energy Partners, LP for $390 million. The transaction is expected to close during the third quarter of 2011.
Big Sandy is an approximately 70-mile, 20-inch diameter, natural gas pipeline regulated by the Federal Energy Regulatory Commission (FERC). Placed in service in April 2008 with a current capacity of 171,000 Dth per day, Big Sandy transports natural gas from the Langley, Kentucky natural gas processing complex, to ultimately the Mid-Atlantic and Northeast markets.
"The sale of our Big Sandy Pipeline is another step in our commitment to prioritize our capital and accelerate our most profitable investment opportunities, which means primarily Marcellus and also Huron development activities. We will continue to fund this acceleration through our operating cash flow, additional asset sales and available debt capacity," said David Porges, chairman, president and chief executive officer. "We have contracted for capacity to ensure delivery of our growing Huron production and look forward to working with Spectra Energy Partners."
EQT will invest the majority of the proceeds in developing the Company's approximately 520,000 Marcellus acres, including associated midstream gathering; and to develop its extensive Huron reserves. EQT now expects to drill 100 Marcellus wells and 120 Huron wells in 2011. The Company's 2011 CAPEX forecast is increased to between $1,200 and $1,250 million; of which approximately 75% will be used for well development. As a result of this additional investment, EQT is increasing its 2011 production sales volume guidance to between 185 and 190 Bcfe; and establishes a preliminary 2012 volume target of between 245 and 250 Bcfe. A final 2012 target will be set when the Company establishes its 2012 capital budget later this year.
EQT Corp. is an integrated energy Company with emphasis on Appalachian area natural gas production, gathering, transmission and distribution.