RADNOR, Pa. (AP) -- Oil and gas company Penn Virginia said Wednesday that it's buying some property and wells in Texas from Magnum Hunter for about $400 million to help it expand in the oil- and gas-rich Eagle Ford Shale.
Magnum Hunter Resources Corp. said that it plans to use proceeds from the sale to lower its overall debt and for other general corporate purposes.
Shale is a rock formation thousands of feet underground. The Eagle Ford Shale in Texas has hundreds of rigs running and is one of the one of the most actively drilled areas for oil and gas in the U.S.
The acquisition gives Penn Virginia Corp. about 40,600 mineral acres in Texas near current holdings. After the deal closes, Penn Virginia will have 117 producing wells in the Eagle Ford Shale.
Penn Virginia said that when accounting for the acquisition, it now anticipates drilling up to 62 wells in the Eagle Ford Shale this year. Its prior outlook was for 38 wells.
Due to the acquisition and the positive results of additional wells drilled in the region's Lavaca county, the company said it has decided to keep its full working interest of about 94 percent in 17 of 22 drilling units in Lavaca that it had previously considered selling.
Penn Virginia plans to finance the deal with debt, equity and available cash. The Radnor, Pa., company plans to sell $400 million in debt due 2020 to help pay for the acquisition.
The acquisition is expected to close next month.
Shares of Penn Virginia added 1 cent to $3.91 in morning trading, while Magnum Hunter's stock rose 23 cents, or 6 percent, to $4.04.