Fort Worth, Texas-based XTO Energy Inc., a subsidiary of Exxon Mobil Corp., Irving, Texas, (NYSE: XOM) has purchased the Fayetteville shale gas assets of Houston-based Petrohawk Energy Corp. for approximately $575 million.

The Fayetteville shale gas assets are primarily in Cleburne and Van Buren counties, Arkansas.

Petrohawk had estimated proved reserves in the Fayetteville shale of approximately 299 billion cubic feet of gas (Bcf) as of year-end 2009. Current production is approximately 98 million cubic feet of gas equivalent per day (Mmcfe/d).

Additionally, Petrohawk has agreed to sell XTO Energy its midstream assets in the Fayetteville shale for $75 million. Combined, the two deals are worth $650 million.

The portion of the deal involving the midstream assets is expected to close in early 2011. The effective date is October 1, 2010.

Bank of America Merrill Lynch is financial advisor to Petrohawk.

Michael Hall, senior analyst at Wells Fargo Securities LLC, says that although the deal value was "somewhat below our expectations of more than $700 million," the firm still views the sale as positive.

Hall estimates the deal metrics for the combined sale, consisting of 299 Bcfe proved and 98 MMcfe/d flowing, at $2.17 per Mcfe and $6,633 per Mcfe/d, respectively.

"(The deal) finalizes an important funding catalyst for Petrohawk's 2011 program," Hall says in a Dec. 23 research report. "Net of these sales, we put the 2011 capex program at around $550 million above cash flow on our deck, or some $580 million on the strip—both very manageable numbers by our view."

Raymond James analyst J. Marshall Adkins equates the deal to $1.92 per Mcf or around $5,900 per flowing Mcf, slightly below its early 2010 divestitures, "but a fair price considering today's gas prices," he concedes.