Monday, March 15, 2010

Petrohawk Yard Sale: Two Down, One to Go

Petrohawk announced today that it has found a buyer for its producing assets in the Terryville Field in northern Louisiana.  The company agreed to sell the assets, which are located in Claiborne and Lincoln Parishes for $320 million to a private company. 

As we've noted before, Petrohawk is selling assets to concentrate its attention and capital on its shale gas properties, specifically the Haynesville and Eagle Ford Shales.  The company is raising capital by selling future cash flow.  The bet is that Petrohawk can reinvest the new capital and earn a greater amount of future cash flow.  The Haynesville Shale is a strong opportunity, but Petrohawk is exposing itself to risk in the short-term, especially if natural gas prices tank badly. 

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