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Integrated energy player EQT Corporation (EQT - Free Report) has inked a definitive agreement worth $113 million with Chesapeake Energy Corporation (CHK - Free Report) and its partners for Marcellus acreage and ten wells in Pennsylvania. The transaction is likely to close on May 30, 2013.

The acquisition comprises of about 67,000 net acres in Marcellus and 32,000 net acres in dry Utica play. The total acreage of 99,000 in southwestern Pennsylvania is to cost $60 million while the remaining $53 million is for the 10 Marcellus wells in Washington County.

Of the total acreage in Marcellus, around 25,000 acres, which lies in the core Marcellus development areas of Washington, Greene, and Allegheny counties, will be developed through multi-well pad drilling and extended laterals. The remaining 42,000 Marcellus acres are likely to face hindrances in developments at present due lease expirations in the near-term or a scattered footprint.

Of EQT’s purchase of 10 Marcellus wells, only 3 are producing currently. The remaining 7 are estimated to add about 1.0 billion cubic feet equivalent (Bcfe) to the company’s sales volume, once it comes online by end of 2013. These existing wells represent approximately 54.0 Bcfe of proved developed reserves in total and possess an average lateral length of 4,200 feet.

On the completion of the transaction, EQT proposes to drill around 4 wells on the new acreage towards the end of 2013. These drilling activities are not expected to have a major impact on the company’s 2013 capital budget or the sales volume guidance, which was recently, raised to 340 — 350 Bcfe.

EQT holds a Zacks Rank #2 (short term Buy rating). However, there are other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas industry like Newpark Resources Inc. (NR - Free Report) , and EPL Oil & Gas, Inc. that appear more attractive in the short term.

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