Cabot Oil & Gas Corp said it would sell its Eagle Ford Shale assets to a unit of Venado Oil & Gas LLC for $765 million as the oil and gas producer tries to cut down costs.
The asset sale includes 74,500 net acres of shale field, which had produced 15,656 barrels of oil equivalent per day in the third quarter, the company said.
U.S. shale producers have been selling off assets in Eagle Ford and North Dakota’s Bakken basins to develop projects in the liquids-rich Permian basin, which has lower break-even costs.
“In a higher oil price environment, the Eagle Ford Shale assets were a nice complement to our Marcellus Shale position and provided capital allocation optionality,” said Chief Executive Dan Dingus, explaining the rationale of the sale.
Oil and gas producers are also looking to spend within their means as crude prices remain between $60 and $70 per barrel, more than 43 percent lower than the 2014 price.
Cabot said it would record a one-time charge of $270 million to $280 million on the Eagle Ford sale in the fourth quarter.
Separately, the company also announced the sale of its remaining East Texas assets to an undisclosed buyer.
The Eagle Ford sale is expected to close in the first quarter of 2018.
