Trans Energy Inc. (OTC: TENG) is parting ways with roughly one-third of its acreage position in the Marcellus Shale in northern West Virginia.

The pure play Marcellus company said April 9 it signed an agreement to sell its assets in Wetzel County to privately-held TH Exploration LLC, a Tug Hill company, for about $71.3 million.

The divestiture consists of 5,159 net acres and 12 producing Marcellus wells. The company, based in St. Marys, W.Va., will retain its core acreage positions of about 10,400 net acres in Marshall and Marion counties.

Trans Energy and its joint venture partner, Dallas-based Republic Energy Inc., will continue to own a combined 27,800 net acres in the counties.

"Today's announcement supports the belief that our team's hard work and well defined strategy has built a position in northern West Virginia that is highly valuable," said John Corp, president, in a release.

A significant portion of the sale proceeds will be used toward debt repayment, which will leave the company in a better position to then focus on the development of its core acreage positions, Corp said.

"We have been successful in our efforts to expand the overall acreage position of our joint development arrangement with Republic Energy over the past year, particularly in Marion and Marshall counties," he said.

Trans Energy, Marcellus, Shale, West Virginia, Map, Wetzel County, Marshall County, Marion County, TH Exploration, Republic Energy

Corp said the areas represent attractive opportunities for the company to increase shareholder value.

Trans Energy management said it can drill about 150 horizontal Marcellus wellbores currently, with lateral lengths of at least 4,500 feet in Marshall and Marion counties, pending permitting.

Ultimately, management anticipates drilling more than 350 such horizontal Marcellus wells on the acreage position, pending additional title work and potential leasehold acquisitions that have already been planned.

A significant amount of the company's acreage is also prospective for the Utica Shale and Upper Devonian formations, according to a February company presentation.

In a company presentation, Trans Energy said it has proved developed reserves in the Marcellus region alone of 77.3 billion cubic feet equivalent (Bcfe) using Dec. 31, 2014 internal estimates. The company’s recent daily production at the time was 20,000 Mcfe.

The company expects to receive about $47 million at closing, net of funds used to repurchase assets that are to be included in the sale, with any incremental funds expected to be received upon the successful resolution of certain title actions that are ongoing and the release of funds that will be held in escrow for a time following the closing.

The transaction is expected to close about 90 days following the signing of the agreement, pending satisfactory title and environmental diligence by the buyer and the satisfaction of certain closing conditions specified in the agreement. The sale has an effective date of Oct. 1, 2014.

TH Exploration is focused on acquiring and operating oil and gas interests in Pennsylvania and West Virginia. Tug Hill Operating LLC is a privately-held E&P with offices in Fort Worth, Texas, Canonsburg, Pa., and Boulder, Colo.

Contact the author, Emily Moser, at emoser@hartenergy.com.