Chief Oil & Gas Announces Agreement to Sell a Portion of Its Marcellus Shale Assets

DALLAS, May 4, 2011 /PRNewswire/ -- Chief Oil & Gas LLC ("Chief") and Tug Hill, Inc. ("Tug Hill") today announced they have entered into an asset purchase and sale agreement to sell certain natural gas properties in the Marcellus Shale to Chevron Corporation (NYSE: CVX).  The sale assets include approximately 228,000 net acres located primarily in the southwestern part of the Marcellus Shale.  

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"We are pleased to enter into this agreement with Chevron and feel it is an excellent addition to their recently acquired Atlas Marcellus position," said Chief's President and CEO, Trevor Rees-Jones.  "After the sale of these properties, Chief and Tug Hill will have approximately 125,000 acres of Marcellus leasehold, focused in the Bradford, Susquehanna, Tioga, Sullivan and Wyoming counties of northeastern Pennsylvania. We are enthusiastic about the increased potential of the northeast Pennsylvania area as the U.S. makes a transition to using home-grown, clean-burning natural gas as the primary fuel of the future," said Rees-Jones.

"Chief will maintain its regional office in Wexford, PA as well as its office in Lycoming County. Chief's midstream subsidiary, Chief Gathering, will not be affected by the sale and will maintain its field office in Lycoming County and continue to develop its planned pipeline infrastructure in Pennsylvania," Rees-Jones continued.

Since 2007, Chief Oil & Gas has drilled 131 wells in the Marcellus Shale and will remain an active operator developing this world class field. Chief plans to exit 2011 as operator of 3 rigs drilling in the Marcellus Shale, not counting non-operated interests owned in leases and units being drilled by multiple rigs operated by others.

Mark Deverka / Bank of America Merrill Lynch represented Chief and Tug Hill in this transaction.

About Chief Oil & Gas LLC

Based in Dallas, Texas, Chief Oil & Gas is a privately held, independent oil & gas company engaged in the exploration, development and production of oil and natural gas throughout the continental United States. For more information, visit www.chiefog.com.

About Tug Hill, Inc.

Tug Hill is a private diversified investment firm based in Fort Worth, Texas.  The firm's largest investment concentration is in non-operated working interests, leasehold ownership, and fee minerals in conventional and unconventional domestic oil & gas.  Tug Hill also actively invests in real estate and has diversified holding in the public and private equity markets.

SOURCE Chief Oil & Gas, LLC