(Bloomberg) -- EQT Corp. agreed to buy Chevron Corp.’s Appalachian shale assets for $735 million as the biggest producer of U.S. natural gas takes advantage of an industry slump to expand.The transaction is expected to close by the end of the year, EQT said in a statement on Tuesday. Chevron has been trying to unload its Appalachian gas holdings since late 2019, when it recorded an $11 billion writedown for that asset and others amid a swelling domestic gas glut and cratering prices for the furnace and power-plant fuel.The acquisition is the latest in a string of recent deals where shale drillers are seeking to add scale to cope with a plunge in commodity prices that has left much of the industry unprofitable.“This acquisition is a natural bolt-on extension of EQT’s dominant position in the core of the southwest Marcellus and supplements our already impressive asset base,” EQT Chief Executive Officer Toby Rice said in the statement.The Chevron assets include about 100 work-in-progress wells, with a net production capacity of 450 million cubic feet a day, EQT said. It will also give the shale explorer a 31% ownership interest in pipeline company Laurel Mountain Midstream.EQT indicated it may fund the deal with cash on hand, a revolving credit facility or a separately disclosed issuance of up to 23 million common shares. EQT fell 4% to $15.51 at 4:37 p.m. Eastern time in after-hours trading. Chevron was little changed.EQT has also made a proposal to acquire rival CNX Resoures Corp., people familiar with the matter told Bloomberg News last week. No final decision had been made and EQT could opt to not proceed with a potential deal, they said.CNX fell 1.6% after the arrangement with Chevron was announced.EQT already is the largest supplier of U.S. gas, producing 44% more than its nearest competitor, Exxon Mobil Corp., according to figures compiled by the Natural Gas Supply Association. EQT pumped about 4 billion cubic feet a day as of the first quarter.(Updates with deal details from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A collapse in crude oil prices has forced most oil and gas producers to drastically cut costs by laying off thousands of employees and cutting down on drilling. The job cuts, which are on top of Chevron's plan to reduce 10%-15% of its own workforce, come after the company promised to lower its operating expenses by $1 billion this year to cope with the downturn. Chevron's 10%-15% cuts would imply a reduction of between 4,500 and 6,750 jobs, while job cuts at Noble will reduce the total workforce by roughly another 570 positions.