Noble Energy, Inc. (NYSE:NBL) announced the extension of the sale of its Marcellus Venture stake. The company had earlier in May expressed the plans to sell its shares in Marcellus midstream master a limited partnership agreement for about $765 million cash.
The contract, which was highly expected to close in the third quarter of the year, came during the time when to company decided to make about $1.2 billion through the selling of its upstream assets located in the northern West Virginia and southern Pennsylvania. Noble Energy is in the process of restructuring it’s onshore operations with lots of emphases put in both Colorado and Texas plants as the firm tries to move away from the Marcellus.
During the May announcement, Noble stated that they plan to sell one of the holding firms that own a notable 50% interest in the Cone Gathering LLC. Furthermore, about $21.7 million common and partnership units will be sold to the group of companies based at Houston.
The Cone Midstream partners are a simple joint effort between the Consol Energy Inc, and Noble. The two firms have earlier partnered on an upstream business in the Marcellus although the firms split up recently. Up until recently, Noble’s Marcellus-related contracts have never been affected.
Since its first IPO in 2014, the Cone Midstream was performing exceptionally well exceeding its sales forecasts despite the dynamic macroeconomic backdrop challenges. According to David Stover, the chairman, president, and CEO at Noble stated that if the transaction succeeds Noble Energy will draw up over $1 billion in their total value from the Marcellus midstream venture, which represents about three times its net invested capital.
At the moment, Noble is focused more on using the proceeds collected from the divestitures to recover the cash lost during the recent acquisition of the Clayton Williams Energy, reduce the outstanding debt, and support it’s American onshore development.