US-based oil and natural gas producer Range Resources is set to offload its natural gas operations in southwestern Virginia’s Nora field for $876m in a bid to reduce debt.
As part of the transaction, the company will sell about 3,500 operated wells and about 460,000 net acres in the Nora/Haysi combined fields.
During the third quarter, the Nora assets produced 109 Mmcf per day representing 7.5% of Range Resources’ net production.
“While these are great assets operated by a talented team, bringing the value forward through a sale was the best decision for our shareholders.”
Following the sale, the company will be able to cut total debt by an expected 24% and further bolster its financial position.
Range Resources chairman, president and CEO Jeff Ventura said: “While these are great assets operated by a talented team, bringing the value forward through a sale was the best decision for our shareholders.
“Using our consistent, return-focused capital allocation process, we will continue to review our portfolio for opportunities to bring value forward where other assets cannot compete for capital in comparison our 1.6 million stacked-pay acreage position in the Marcellus, Utica and Upper Devonian.”
The sale, which is scheduled to close by the end of the year, is also expected to reduce direct operating expenses, brokerage natural gas and marketing expenses for 2016.
According to Range Resources, the sale is subject to customary closing conditions as well as purchase price adjustments.
The company purchased additional interest in the Nora Field in June 2014 and took over 100% ownership of the asset.
The Nora area produces from multiple stacked pay horizons including coal bed methane, tight gas sand and Devonian shale.