The sale will see a complete withdrawal by Norwest from West Virginia. The project has some 46,000 acres under lease and five wells drilled. The sales price is at a significant premium to the cost of acquiring leases and will see sunk well costs recovered.
Norwest CEO, Joe Salomon commented development of the fractured shale play has been limited by the availability of equipment in the area, and results to date have been mixed. Our joint venture partner is interested in further exploring this area and made an attractive offer for our interest.
The sale is subject to a final Purchase and Sales Agreement with closing set for early November.
Norwest's is assessing its gas projects in Kentucky and Tennessee where new parties have expressed interest.
Norwest's interests in the US are held in a wholly owned subsidiary, NWE Appalachians LLC. Partnership interests in West Virginia prior to sale are Norwest with 29%; Alto Energy with 29%; and Ascent Resources WV Inc with 42%.
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