EQT Corp to buy Chevron's assets in Appalachian basin for $735 million

FILE PHOTO: The logo of Chevron is seen in Los Angeles, California, United States, April 12, 2016. REUTERS/Lucy Nicholson/File Photo

(Reuters) - Natural gas producer EQT Corp EQT.N said on Tuesday it will buy U.S. oil major Chevron Corp's CVX.N assets in the Appalachian basin for $735 million.

The deal includes about 100 work-in-progress wells, acreage in the Marcellus basin and a 31% stake in Laurel Mountain Midstream, a joint venture between Chevron, producer Laurel Mountain and pipeline operator Williams Cos Inc WMB.N.

EQT’s shares fell nearly 4% in after-market trading after it launched an offering of 20 million shares to partially fund the deal alongside cash and borrowings.

The deal comes at a time when the COVID-19 pandemic has slashed energy demand, sent oil prices to historic lows earlier this year and forced producers to cut costs, curtail production and seek consolidation to weather a downturn.

Reuters reported last month that EQT had placed a bid on Chevron’s Appalachia gas properties and a pipeline stake.

Chevron last year said it was considering a sale of the properties and took an $8.17 billion charge to earnings to write down their value and an unrelated U.S. offshore project.

Jefferies LLC acted as EQT’s financial adviser for the deal.

Reporting by Arundhati Sarkar in Bengaluru; Editing by Shounak Dasgupta