CONSOL Energy Sells Northern Powder River Basin Assets for $170 million in Cash, While Retaining an 8% Production Royalty
CONSOL Energy Inc. (NYSE: CNX), the leading diversified fuel producer headquartered in the Eastern U.S., today announced that it has sold its non-producing Northern Powder River Basin (PRB) assets for $170 million in cash to Cloud Peak Energy (NYSE: CLD). Additionally, CONSOL Energy has structured the transaction to retain an 8% production royalty interest on approximately 200 million tons of permitted fee coal. The transaction is effective as of June 29, 2012.
CONSOL Energy's Northern PRB assets consist of three separate parcels, including Youngs Creek Mining Company LLC and CX Ranch, both of which are 50% owned by Chevron, and additional related properties in and around Sheridan, Wyoming.
"Since the 2010 acquisition of the Dominion Appalachian gas assets, CONSOL Energy has been able to pull value forward and focus on its near-term opportunity set," commented J. Brett Harvey, Chairman and CEO. "As a result, we have been organically growing our coal and gas businesses in Appalachia while divesting properties that are more naturally suited to others."
With this transaction, CONSOL Energy's asset divestitures for 2012 to date total $224 million. The company expects to deploy this cash towards its 2012 capital expenditure program, which includes both growth and maintenance projects. None of the assets sold in 2012 to date has generated revenue for CONSOL Energy.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.