Southwestern Energy announces multimillion-dollar deal to purchase mineral leases in Moffat and Routt counties
March 5, 2014
Craig — A big energy player announced Wednesday that it had signed an agreement to purchase the mineral leases on 312,000 net acres in Moffat and Routt counties for $180 million, according to a press release.
Houston-based Southwestern Energy will purchase the leases from Quicksilver Resources Inc., targeting crude oil, natural gas liquids and natural gas contained in the Niobrara formation, according to a news release from Southwestern Energy.
Shell Oil, which had a joint venture with Quicksilver the mineral leases, announced last August that it would pull out of Northwest Colorado and put its stake up for sale. Now, Southwestern Energy — the fifth-largest producer of natural gas in the United States, according to its website — will take over the leases.
The transaction is expected to close in the second quarter of 2014.
"We are very excited about our entry into this emerging liquids-rich resource play," President and Chief Executive Officer of Southwestern Energy Steve Mueller said in a statement. "This acreage position covers a substantial area in the Sand Wash Basin — over 50 miles across and over 20 miles wide — and provides the opportunity for us to leverage our operational strengths into a new large, scalable project. Upon closing, we expect that we could begin drilling operations as early as June of this year."
Moffat County Natural Resource Director Jeff Comstock is optimistic about the purchase and thinks the news could be great for Northwest Colorado, but he wants more information from Southwestern Energy before hanging his hat on the deal.
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"I think it'd be foolish to speculate on what this means until we have a discussion with Southwestern Energy," Comstock said.
Shell Oil called Comstock on Wednesday morning to notify him and the county commissioners about the business deal before it was made public.
"We were told that the area of mutual interest in both counties was being sold," he said.
Last summer's news that Shell was selling its stake in Northwest Colorado created a nervous ripple effect on local economies in the northwest corner of the state.
It's unclear whether Southwestern Energy will produce an economic boon for the area, Comstock said.
Contact Noelle Leavitt Riley at 970-875-1790 or email@example.com.