CONSOL will pay a total gross consideration of up to $190m in two installments basis- approximately 50% paid at closing last week, with the balance due over time as the acres are drilled. CONSOL has also committed to be an anchor shipper on Dominion’s transmission system.
The acquired the gas rights to both the Marcellus shale and the Upper Devonian formations in the storage fields.
The majority of the acreage, which is associated with Dominion’s Fink-Kennedy, Lost Creek, and Racket Newberne gas storage fields in West Virginia, lies in the northern portion of Lewis county and the southern portion of Harrison county.
CONSOL expects that over one-half of the acres will have wet gas.
CONSOL chairman and CEO Brett Harvey said this transaction reinforces the company’s commitment to being a leading natural gas producer in the Appalachian basin.
"These parcels represent what could be the largest untapped contiguous acreage in the southern core of the Marcellus Shale. They complement our already significant acreage position in Northern West Virginia. As CONSOL Energy accelerates its gas drilling in the next few years, and continues to improve its efficiency through enhanced production techniques, we believe this transaction could provide us with more than 350 risked long lateral Marcellus Shale drilling locations," Harvey added.
