Hess to Sell Utica Shale Gas fields to American Energy Partners

US-based independent oil and shale energy producer Hess Corp, yesterday said that it has entered into an agreement to sell 74,000 acres of its dry natural gas acreage in the Utica Shale to an undisclosed third party for $924 million.

Although it did not name the buyer, several US media reported that former Chesapeake CEO Aubrey McClendon's new company American Energy Partners is the mystery buyer.

American Energy Partners told The Wall Street Journal that an affiliate had raised $500 million to invest in oil wells across the country.

John Hess, CEO of Hess, said, ''The sale of our Utica dry gas acreage is an example of our continued commitment to grow shareholder value through ongoing portfolio reshaping.''

''While our wells in the dry gas portion of the Utica were highly productive, we concluded that the potential returns from such an investment, at current and projected natural gas prices, no longer justified retaining this acreage as a strategic part of our overall liquids-based asset portfolio,'' he added.

Hess still has holds 86 acres in the Utica along with its drilling partner Consol Energy.

New York-based Hess had in 2010 started to focus on the exploration and development of its most promising lower risk, higher growth, oil-linked E&P assets.

In the first phase of transformation, Hess invested in its most promising assets, including increasing its leadership in the Bakken oil shale, and entered the Utica shale, while acquiring an additional ownership stake in the Valhall Field in Norway.

It closed a joint venture refinery in the US Virgin Islands and divested a number of assets worth $1.7 billion in 2010 in the UK, Norway, and Indonesia.

Hess followed this up in the second phase by divesting non-core assets worth nearly $2.5 billion across Europe and Asia, including two oilfields in the Azerbaijan sector of the Caspian Sea and its 2.36 per cent interest in the associated Baku-Tbilisi-Ceyhan pipeline, to India's Oil and Natural Gas Corp, for $1 billion.