Newfield Exploration Company and Hess Corporation have signed a joint exploration agreement in the Marcellus Shale play. The agreement covers up to 140,000 gross acres primarily in Susquehanna and Wayne Counties, Pennsylvania. Newfield will operate the new venture with each company having a 50 percent interest.
"Today marks our entry into the Marcellus Shale -- likely to become one of our nation's largest natural gas resource plays," said Lee K. Boothby, Newfield President and CEO. "Today, with substantially all of our acreage held-by-production in the Woodford Shale, it's a great time for us to enter an important new focus area and apply our expertise to a similar play of scale. We expect to build a business here, just as we have done in the Mid-Continent and the Rocky Mountains. The Newfield family prides itself in being a good corporate citizen in the areas where we operate."
Newfield entered the Woodford Shale in 2003 and assembled 165,000 net acres. The Company has drilled approximately 300 horizontal wells and has current gross operated production capacity of nearly 300 MMcfe/d.
The 2009 portion of Newfield's Marcellus Shale activities will be funded within the Company's existing $1.45 billion capital budget. Drilling operations are not expected to commence until 2010.
"Entering the Marcellus Shale builds on the unconventional expertise Hess has in North Dakota's Bakken play," said Greg Hill, Hess President of Worldwide Exploration and Production. "Hess has an established technical capability in horizontal, multi-stage fractured wells and we have a reputation for sound environmental operating practices. We are pleased to partner with Newfield in this venture and look forward to a project that may bring economic development to the area and natural gas to the larger East Coast market."
The terms of this transaction are dependent upon Newfield and Hess finalizing additional agreements over the next few weeks.
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