EQT Corp. (NYSE: EQT) continued its Appalachian pure play quest, buying even more Marcellus and Utica holdings in a deal for next-door neighbor Statoil’s (NYSE: STO) acreage.

EQT said May 2 that it signed an agreement to buy 62,500 net acres in the Marcellus Shale for $407 million.

The assets are primarily located in Wetzel, Tyler and Harrison counties, W.Va., and add to EQT’s core development area. The Wetzel addition will compliment adjacent EQT operations. The deal adds production of 50 million cubic feet equivalent per day (MMfce/d).

In line with the company’s consolidation strategy, the acquisition increases EQT’s core undeveloped Marcellus acreage by 29%. The transaction also includes drilling rights on an estimated 53,000 net acres that are undeveloped and prospective for the deep Utica.

“Management has been vocal about being on the hunt for acreage and this transaction fits the bill with acreage offsetting its current position in Wetzel, and deep Utica rights included on 85%,” said Gordon Douthat, senior analyst with Wells Fargo Securities LLC

EQT launched an equity offering, later upsized, to pay for the transaction and potentially more.

The offering will generate $809 million in gross proceeds, including greenshoe, “which would more than cover the $407 million transaction price,” he said. As of March 31, EQT’s cash balance was $1.6 billion with $1.5 billion undrawn on its revolver.

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“Management on numerous occasions has indicated its desire to preserve its clean balance sheet, which it views as a competitive advantage, and today’s equity offering certainly bolsters this case,” Douthat said. “We wonder if over equitizing the transaction might potentially indicate more transactions are to follow.”

Statoil said equity production from the properties in the first quarter of 2016 was about 9,300 barrels of oil equivalent per day. The company will retain its operated properties in Ohio and its nonoperated Marcellus positions.

Since much of the acreage is contiguous with EQT’s development area the company said the purchase enables it to extend lateral lengths of 106 locations from 3,000 feet to 6,500 feet, to reducing overall costs and “deliver stronger well economics.”

Leases are either HBP or expire beyond 2018, EQT said.

In line with the company’s consolidation strategy, the acquisition increases EQT’s core undeveloped Marcellus acreage by 29%. The deal also includes drilling rights on an estimated 53,000 net acres that are undeveloped and prospective for the deep Utica.

EQT said it will not alter its 2016 capex or operating cash flow guidance.

The public stock offering consists of 10.5 million shares of common stock and a 1.58 million stock greenshoe potentially could fund other acquisitions and pay for general corporate purposes, Douthat said. The transaction is expected to close by July 8.

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Darren Barbee can be reached at dbarbee@hartenergy.com.