Dominion Closes Drilling Rights Contract with Antero
Dominion (NYSE: D) announced today that it closed its agreement to assign drilling rights to 114,259 acres in the Marcellus Shale prospect to Antero Resources for about $347 million ($205 million after tax), or about $3,037 per acre. Dominion will receive a 7.5 percent royalty interest on future natural gas production from the assigned acreage.
After-tax proceeds will be used initially to reduce outstanding short-term debt. Longer term, the proceeds are expected to partially offset previously announced equity issuances in 2009.
Dominion has drilling rights on 600,000 to 800,000 acres in the Marcellus Shale formation, including the acreage assigned to Antero. Dominion is continuing its effort to market additional Marcellus Shale acreage.
Antero is one of the anchor tenants of the proposed Dominion Keystone pipeline, which is designed to transport Marcellus Shale production to market. Dominion continues to negotiate binding precedent agreements with potential customers following an open season.
Barclays Capital Inc. acted as financial adviser to Dominion on the transaction.
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