Newfield Exploration Co. (NYSE: NFX) announced August 3, the sale of Texas assets to further add cash to its development in the Oklahoma Stack Play.
In multiple transactions, Newfield agreed to sell its Eagle Ford Shale and South Texas conventional natural gas assets for nearly $390 million. The Eagle Ford assets were sold to EnCap-backed Protégé LLC, while the conventional assets were sold to an undisclosed buyer. The sales consisted of substantially all of Newfield’s assets in Texas. The Eagle Ford assets consisted of 35,000 net acres in Dimmit and Atascosa counties, Texas.
The transactions are expected to close in the third quarter of 2016, and are subject to ordinary closing conditions.
Newfield’s strategy is to sell off non-strategic assets to fund development in its top tier assets in the Anadarko Basin’s Stack and Scoop plays. Newfield said it plans to commence full-field development in the Stack in 2017. The company ended the second quarter with $165 million cash on hand, Lee K. Boothby, chairman and CEO, said on an Aug. 3 earnings call.
“The proceeds from the sales of our Eagle Ford and conventional South Texas gas properties will replenish our cash balance and more than bridge any deficit between our cash flow and planned investments” in 2016 and 2017, he said.
Including its exit from Texas, Newfield has generated about $3 billion in proceeds from asset sales since 2009, Boothby said. The Stack is one of the few areas in the U.S. that has seen an increase in rig counts despite low commodity prices, he added.