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Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events
On July 26, 2018 we entered into a purchase and sale agreement (the “Purchase Agreement”) with EAP Ohio, LLC, a private oil and gas company headquartered in Houston, Texas (“Encino”), pursuant to which Encino agreed to purchase all of our approximately 1,500,000 gross (900,000 net) acres in Ohio, of which approximately 320,000 net acres are prospective for the Utica Shale with approximately 920 producing wells, along with related property and equipment (collectively, the “Designated Properties”) for a purchase price of approximately $2.0 billion, with additional contingent payments to us of up to $100 million comprised of $50 million in consideration in each case if, on or prior to December 31, 2019, there is a period of twenty (20) trading days out of a period of thirty (30) consecutive trading days where (i) the average of the NYMEX natural gas strip pries for the months comprising the year 2022 equals or exceeds $3.00/mmbtu as calculated pursuant to the agreement, and (ii) the average of the NYMEX natural gas price strip prices for the months comprising the year 2023 equals or exceeds $3.25/mmbtu as calculated pursuant to the agreement.
Average net daily production from the Designated Properties was approximately 107,000 boe during 2017 consisting of 427,000 mcf of natural gas, 26,000 barrels of natural gas liquids and 10,000 barrels of condensate. As of December 31, 2017, net proved reserves associated with the Designated Properties were 480 million boe (72% natural gas, 23% natural gas liquids and 5% oil).
Closing of the transaction is subject to customary conditions, including waiver of certain pre-existing preferential purchase rights, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, other regulatory approvals and certain other closing conditions. Closing is expected to occur in the fourth quarter of 2018, contingent upon satisfaction of such closing conditions and the absence of termination rights. We expect to apply the net proceeds toward the reduction of debt.
Pursuant to the Purchase Agreement, the purchase price is subject to customary adjustment provisions, including for results of operations, adjustments for title and environmental defects and preferential purchase rights. The Purchase Agreement also contains customary representations, warranties, covenants and indemnities.