CONSOL Energy and Noble Energy Close ‘O.K.’ $3.3B Agreement
- Oct 05, 2011
by Liviu Oltean, Associate Editor
CONSOL Energy Inc. and Noble Energy Close have closed on an agreement that entails the joint development of CONSOL’s Marcellus Shale assets in Pennsylvania and West Virginia.
Following this agreement, CONSOL will receive payments of about $3.3 billion.
Noble Energy has obtained a 50 percent interest in 628,000 acres for $1.0 billion, which will be paid in three installments. The first installment has been paid at the closing of the agreement. In addition, Noble Energy obtained a 50 percent interest in producing Marcellus Shale wells for $160 million and 50 percent interest in gathering systems for $72 million.
The agreement between the two companies also involves joint development for which Noble will have to pay $2.1 billion in the form of a 1/3 drilling carry of certain CONSOL working interest obligations.
“As we have worked with Noble Energy’s team over the last six weeks to put this joint venture together, we have seen that we share similar corporate culture and we share a common vision for the accelerated development of these assets,” said J. Brett Harvey, CONSOL’s chairman and CEO.
CONSOL Energy Inc. is the leader in diversified energy production in the Appalachian basin, and it was named by Fortune magazine as one of the most admired companies in America.
In related news, D. Raja, the Republican candidate for Allegheny County in the upcoming elections, has disclosed a proposal that stipulates a new development at the Pittsburgh International Airport – the creation of a Marcellus Shale-focused business center. Raja’s proposal includes the construction of a research and innovation center that is meant to promote and support Marcellus Shale developments and high-tech startup companies, the Pittsburgh Business Times reports.
The project is meant to enable the use of 1,800 acres of land that are not suitable for the structural development of the airport due to geographic impediments.