HEADLINES: Range Resources’ Marcellus Sale; Nine Energy, Magnum Oil Tools Merger
In 2004, Range Resources pioneered the Marcellus Shale in Washington County, Pa. This week, the company signed and closed an agreement to sell a proportionately reduced 1% overriding royalty in its Washington County leases to an undisclosed buyer for gross proceeds of $300 million. Range plans to use the proceeds from the sale to lower its debt by 7%, resulting in an estimated net reduction in 2019 cash flow of about $10 million.
Nine Energy Service plans to beef up its completion tools business with the $493 million acquisition of downhole technology provider Magnum Oil Tools. Nine will acquire Magnum, which does not have any debt, for a combination of about $334 million in cash and 5 million shares of Nine common stock valued at $159 million.
Interior Secretary Ryan Zinke hinted to at least six coastal U.S. coastal states that he will keep their waters out of a looming plan to expand offshore drilling. While those words may have raised hopes for other states with objections to the plan, Zinke said the six states lack enough oil to be included anyway. Those six states are: New Hampshire, Maryland, North Carolina, Maine, Oregon and Washington. The final proposal by the Trump administration is expected later this year.
A massive Royal Dutch Shell natural gas field in northern British Columbia is getting greener. Shell said The Groundbirch Project, located above Canada’s richest shale gas deposit, slashed project emissions by moving its newest gas plant to hydroelectric power. It also replaced diesel with natural gas in drilling. The company said it is now tackling methane with new electric components and a fuel cell trial. Groundbirch will eventually send gas to the Shell-led LNG Canada export terminal approved this month, where it will be cooled for exporting.