CONSOL to Sell Five Coal Mines, Switch Focus to Gas

CONSOL Energy Inc. (NYSE:CNX) announced that it plans to sell Consolidation Coal Company (CCC), its subsidiary, to Murray Energy Corp. in a transaction valued at $3.5 billion. CCC contains CONSOL’s five West Virginia-based longwall coal mines.

The sale will allow CONSOL to focus on increasing its gas production.

As quoted in the press release:

The CCC mines being sold are McElroy Mine, Shoemaker Mine, Robinson Run Mine, Loveridge Mine, and Blacksville No. 2 Mine. Collectively, these mines produced 28.5 million tons of thermal coal in 2012. Murray Energy is acquiring approximately 1.1 billion tons of Pittsburgh No. 8 seam reserves.

CONSOL’s River and Dock Operations are included in the transaction.  In 2012, the fleet of 21 towboats and 600 barges transported 19.3 million tons of coal and other commodities along the upper Ohio River system.

J. Brett Harvey, chairman and CEO of CONSOL, said:

While this transaction furthers CONSOL’s E&P growth strategy, the sale of these five mines – assets that have long contributed to America’s economic strength and our company’s legacy – was a very difficult decision for our team. The employees at these mines are among the safest and most productive miners anywhere in the world.  In the end, we concluded that the time had come to sell these mature assets to ownership whose strategic direction is more aligned with those mines.

Click here to read the full CONSOL Energy Inc. (NYSE:CNX) press release.