Equinor Offloads US Eagle Ford Shale Assets
Norway’s Equinor has reached a deal to divest its shale oil and gas business at the Eagle Ford formation in Texas to Spanish partner Repsol for $325mn, it announced in a statement late on November 7.
Equinor entered Eagle Ford in 2010, acquiring rights to a 279-km2 net area via a 50:50 joint venture with Talisman Energy, later bought by Repsol. It bolstered its stake to 63% in 2015 – equity it has now agreed to sell to Repsol, giving the Spanish player 100% ownership.
Equinor reportedly considered withdrawing from Eagle Ford at several points during the oil market downturn, amid weaker earnings. The company netted 43,000 barrels of oil equivalent/day from its interests in the area last year – equivalent to 2% of its global output. It also has some separate midstream assets at Eagle Ford.
“This transaction supports Equinor’s strategy to optimise our onshore US portfolio, enhancing our financial flexibility and focusing our capital on our core activities in the country,” Torgrim Reitan, Equinor’s vice president for international development and production, commented. “The US is a core area for Equinor, demonstrated by recent acquisitions including assets in the Gulf of Mexico, onshore acreage in the Austin Chalk and the Empire Wind project offshore New York.”
The sale to Repsol will be backdated to October 1 2019. Equinor also said it had struck a separate deal with the Spanish firm to acquire a 20% interest in the Monument prospect, located in the Northwest Walker Ridge area of the Gulf of Mexico. It plans to launch drilling at the site before year-end.