Total To Sell Midstream Utica Assets To Group Of South Korean Companies

(RTTNews) - French oil and gas giant Total SA (TTA.L, TTFNF.PK, TOT) said Tuesday that it has agreed to sell its Midstream Utica assets to a group of South Korean companies for $400 million plus an estimated price adjustment of $50 million.

Under the deal, Total will sell its 25 percent stake in Cardinal Gas Services LLC, a midstream company in Ohio's Utica shale play, to E1 Corporation and a consortium led by Samchully, both from South Korea. The transaction is expected to close in October 2014.

Olivier de Langavant, Senior Vice President of Strategy Business Development R&D at Total Exploration and Production said, "The sale of this non strategic asset reflects the Group's active portfolio management and enables us to unlock value while continuing with the development of our resources in the Utica basin as planned."

Since its establishment in 2011, Cardinal Gas Services has built gas infrastructure in the Utica basin, where it gathers and transports Utica's fast-growing production.

Following the close of the transaction, Cardinal will continue to provide to Total the same gas gathering and transportation services. Total said it will continue to be active in the Utica play through its upstream joint venture with Chesapeake Energy Corp. (CHK) and Enervest.

In 2013, Total's U.S. production was 60,000 barrels of oil equivalent per day. In addition to the company's 25 percent stake in the Utica upstream joint venture, Total holds a 25 percent interest in a Chesapeake-operated joint venture in the Barnett shale in Texas.

In the Gulf of Mexico, Total holds a 33.3 percent interest in the Chinook field and a 17 percent interest in the Tahiti field. Additionally, Total and Cobalt International Energy, Inc. (CIE) entered into a strategic alliance in 2009 to explore for oil in the deep offshore Gulf of Mexico.

On Monday, Total confirmed its strategy for profitable growth and its objective to generate $15 billion of free cash flow in 2017. The company also announced an additional asset sale program of $10 billion in 2015-17 and a major program to reduce operating costs by $2 billion per year by 2017, with an immediate impact as of 2015.

TOT is currently trading at $62.70, down $0.86 or 1.35 percent on a volume of 302425 shares.