Nov 18, 2014 2 min read

WPX Energy Inc. will divest itself of its Marcellus Shale assets, a company spokeswoman said Tuesday.

The Tulsa, Okla.-based company, which has about 160 active wells in dry gas areas of the Marcellus Shale in Westmoreland, Susquehanna, Centre and Clearfield counties, has offices in Southpointe and Wyoming County.

Company spokeswoman Susan Oliver said the company, which began drilling in the Marcellus in 2010, announced its decision during its quarterly conference call earlier this month.

She said Chief Executive Officer Rick Muncrief and the company’s board of directors decided to focus on three other areas of the country where WPX has assets: in Colorado for natural gas liquids and in North Dakota and New Mexico, where its drills for oil.

“You look for the best return on investment and the best way to turn those dollars that you have to increase shareholder value,” Oliver said.

She said WPX, which has 20 to 30 people working in the Marcellus, will continue to maintain the wells it has in the Marcellus.

She said it was too early to tell whether WPX would sell its Marcellus assets to one or a number of buyers.

Lou D’Amico, president of Pennsylvania Independent Oil and Gas Association, said later Tuesday he could foresee other companies with smaller drilling operations exiting the dry gas portions of the Marcellus, given the lower prices they’re now getting for the product.

According to the U.S. Energy Information Administration, after the average Henry Hub spot price for natural gas peaked above $12 per thousand cubic feet in July 2008, prices stayed between $3.50 and $4.50 per thousand cubic feet for the past several years.

And even if others follow WPX’s strategy of drilling for more lucrative oil and natural gas liquids, they could eventually find themselves hitting a wall, he said.

“If the Saudis keep knocking (oil) prices down, even that’s going to look ugly,” he said.