OREANDA-NEWS. August 24, 2017. Independent producer Cabot Oil & Gas will sell all of its natural gas assets in Ohio, Virginia and West Virginia to Carbon Natural Gas for $2.5mn as it continues to narrow its gas production focus to its acreage in Pennsylvania.

The sale includes about 780,000 acres with an estimated 52 Bcf of proven reserves, 3,233 wells, associated infrastructure including 311 miles (501km) of natural gas pipelines, and firm transportation agreements on Columbia Gas Transmission and Dominion Transmission.

Carbon said previously it was acquiring assets located primarily in the state of West Virginia that produce about 7.5mn cf/d (212,250 m?), but declined to say who owned the assets. Filings with the US Federal Energy Regulatory Commission (FERC) show joint petitions from the two companies regarding Carbon's acquisition of Cabot's assets in the three states.

Late last week FERC granted the companies' request for waivers to transfer capacity rights on two pipelines to Carbon.

Cabot said it is focusing its operations on oil development in the Eagle Ford shale in southern Texas and on its Marcellus acreage in northeast Pennsylvania, a strategy that likely motivated the company to sell other assets.

Spot prices this month at the Columbia Gas Appalachia pool and Dominion South have averaged an 11?/mmBtu and $1.11/mmBtu discount to the Henry Hub respectively. Production in northeast Pennsylvania could fetch higher pricing at Tennessee Gas pipeline once that pipeline finishes 460mn cf/d of expansions in the area as early as this winter. Cabot has said it plans to ramp up drilling as those projects come on line.