Any of our clients who had leases with Stone Energy will now be dealing with EQT.
Previously, Tug Hill had entered into an offer to purchase Stone Energy’s leases, but EQT came along and offered more money so Stone sold to EQT.
While Tug Hill is still rather new and we don’t have a real feel for what kind of company they are, we do know that EQT has a bad reputation with pretty much everybody in the industry. We would have preferred to have Tug Hill as the operator.
Stone Energy has been hurting badly for a long time. They have been flirting with bankruptcy for at least a year. This summer they re-opened some wells and I thought they might be able to avoid bankruptcy, but the news says otherwise.
As part of the deal, Stone Energy is going to sell it’s Marcellus leases to Tug Hill. Tug Hill is growing slowly but surely in the northern panhandle of West Virginia.
Any of our clients who have leases with Stone Energy will soon be dealing with Tug Hill. Nothing should change, as the lease governs the relationship between you and the company, regardless of which company it is.
Just a quick FYI for any of our clients who are leased with Gastar, Gastar is selling its Marcellus/Utica property to a company called Tug Hill. If you leased with Gastar, you will soon be working with Tug Hill. The sale is scheduled to close on March 31, 2016.
Gastar is selling for two reasons. One, it wants to focus on its Oklahoma holdings, and two, it can’t get a good price for the gas it produces from the Marcellus/Utica.