US-based natural gas producer Cabot Oil & Gas has signed an agreement to divest its Eagle Ford Shale assets to an affiliate of Venado Oil & Gas as part of a deal valued at $765m.

The divestiture of operated and non-operated assets comprises around 74,500 net acres of leasehold, which are mainly located in Frio and Atascosa counties.

The properties produced 15,656 barrels of oil equivalent (Boe) a day during the third quarter of this year.

"These transactions represent a further step in our transformation process and accelerate the value of these assets, while improving Cabot’s cost structure and corporate returns."

Cash proceeds from the transactions are expected to allow the company to further strengthen its balance sheet and fund its ongoing exploratory programmes in future.

Cabot Oil & Gas chairman, president and CEO Dan Dinges said: “These transactions represent a further step in our transformation process and accelerate the value of these assets, while improving Cabot’s cost structure and corporate returns.

“These assets accounted for only 5% of our year-to-date total equivalent production and 4% of our proved reserves.

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“However, based on our current outlook for the oil markets and the resulting rates of return from these assets relative to our Marcellus Shale returns, we did not plan to allocate any incremental capital to the Eagle Ford Shale above the current maintenance capital levels.”

In addition, the company has reached a deal to sell its remaining East Texas assets to an undisclosed buyer as part of a separate development.

The Eagle Ford transaction is subject to customary closing conditions and adjustments and is expected to close during the first quarter of next year, while the sale of the East Texas assets is slated for completion on or before 1 July next year.

Furthermore, Cabot has revised its 2018 capital budget range to $900m to $1bn and updated its daily production growth guidance range for next year to 10% to 15%.