PITTSBURGH and HOUSTON, Oct. 31,
2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) and
Noble Energy, Inc. (NYSE: NBL) (the "Joint Venture") jointly
announced today that the two companies have entered into a
definitive agreement to separate their Marcellus Shale 50-50 Joint Venture (the
"Exchange Agreement"). The two companies have negotiated a
separation of the Joint Venture that was formed in 2011 for the
exploration, development, and operation of primarily Marcellus Shale properties in Pennsylvania and West Virginia. Highlights of the Exchange
Agreement include:
- Each party will own and operate a 100% interest in its
properties and wells in two separate operating areas;
- Each party will have independent control and flexibility with
respect to the scope and timing of future development over its
operating area;
- All acreage operated by CONSOL Energy and Noble Energy, Inc. in
their respective operating areas will remain fully dedicated to
CONE Midstream Partners LP (NYSE: CNNX) ("CONE").
"This agreement with Noble Energy to separate our Joint Venture
is bitter sweet for CONSOL Energy," commented Nicholas J. DeIuliis, president and CEO. "Noble
has been a top-notch partner, and we have enjoyed the collaborative
relationship that we have shared over the past five years. Even
though we have seen much success together, we have agreed that we
must both have the ability to adapt to a changing energy landscape.
The separation of the Joint Venture is consistent with CONSOL's
transitional journey to a pure-play exploration and development
company, and the company's commitment to future growth, in what is
now a more robust and actionable stacked pay opportunity set. As
the parties work towards closing, CONSOL will remain focused on
conducting operations in a safe and environmentally compliant
manner to maximize value to our shareholders."
David L. Stover, Chairman,
President and CEO of Noble Energy, Inc., added, "The
accomplishments of our Joint Venture over the last five years are
outstanding, including significant increases in combined production
and recoverable resources. These outcomes are a direct result of
the high-quality nature of the acreage, but even more so a result
of the combined technical leadership and coordination between our
two companies. Today's agreement between CONSOL Energy and Noble
sets a clear path for both companies into the future. It provides
us with greater control and flexibility over the future pace of
development in the Marcellus. I'd like to personally thank all of
the CONSOL Energy team for their hard work and congratulate them on
the successes we have had together."
Prior to the Exchange Agreement, the Joint Venture collectively
operated approximately 669,000 Marcellus acres. CONSOL Energy and
Noble Energy, Inc. each held 50% working interest. As of the
effective date of the Exchange Agreement on October 1, 2016, total flowing production to the
Joint Venture was 1.07 billion cubic feet per day of natural gas
equivalents.
Subsequent to closing of the Exchange Agreement, the acreage and
production of the prior Joint Venture will be as follows:
- CONSOL Energy will operate a 100% working interest in
approximately 306,000 Marcellus acres with associated production of
approximately 620 million cubic feet per day of natural gas
equivalents. The majority of the acreage operated by CONSOL Energy
resides in Pennsylvania.
- Noble Energy, Inc. will operate a 100% working interest in
approximately 363,000 Marcellus acres with associated production of
approximately 450 million cubic feet per day of natural gas
equivalents. The majority of the acreage operated by Noble Energy,
Inc. resides in West
Virginia.
Maps reflecting the new acreage positions for each company are
available on each Company's website.
In addition to the acreage and production realignment between
the two companies, Noble Energy, Inc. will also remit a cash
payment of approximately $205 million
to CONSOL Energy at closing. The exchange of properties and cash
result in the elimination of the remaining outstanding carry cost
obligation due from Noble Energy, Inc. to CONSOL Energy.
While the Exchange Agreement creates independent ownership
interests in the acreage and production currently gathered by CONE,
it does not change the total acreage dedicated to CONE, the
gathering rates, or other fundamental terms for the services
provided by CONE. CONSOL Energy and Noble Energy, Inc. remain as
co-sponsors of CONE and shippers on CONE's gathering systems, while
retaining their respective general partnership and limited partner
ownership interests in CONE.
Completion of the Exchange Agreement is subject to a number of
conditions, including expiration of the Hart Scott Rodino Antitrust
Improvements Act waiting period and other customary
conditions. The closing of the Exchange Agreement is not
subject to a financing condition and is expected to close in the
fourth quarter of 2016.
Conference Call Information
CONSOL Energy will host a
conference call today at 10:00am ET.
A live webcast of the conference call can be accessed at the
investor relations section of the company's website, at
www.consolenergy.com. Security analysts and institutional investors
may also listen by dialing (US) 800-230-1074 or (Intl.)
612-234-9960, with access code 405600. A slide presentation
summarizing the transaction may be accessed at
www.consolenergy.com.
Third Quarter Earnings Call Information
CONSOL Energy
will hold its third quarter earnings webcast on November 1, 2016, at 10:00am ET (9:00 a.m.
CT), which can be accessed through its website.
Noble Energy, Inc. will hold its third quarter earnings webcast
on November 2, 2016, at 9:00am ET (8:00 a.m.
CT), which can be accessed through its website.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is
a Pittsburgh-based energy
producer, and one of the largest independent natural gas
exploration, development and production companies, with operations
centered in the major shale formations of the Appalachian basin.
The company deploys an organic growth strategy focused on
developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion
cubic feet equivalent of proved natural gas reserves. CONSOL
Energy is a member of the Standard & Poor's Midcap 400 Index.
Additional information may be found at www.consolenergy.com.
About Noble Energy
Noble Energy (NYSE: NBL) is an
independent oil and natural gas exploration and production company
with a diversified high-quality portfolio of both U.S.
unconventional and global offshore conventional assets spanning
three continents. Founded more than 80 years ago, the company is
committed to safely and responsibly delivering its purpose:
Energizing the World, Bettering People's
Lives®. For more information, visit
www.nobleenergyinc.com.
Cautionary Statements
This press release contains
certain "forward-looking statements" within the meaning of federal
securities laws. Words such as "anticipates", "believes,"
"expects", "intends", "will", "should", "may", and similar
expressions may be used to identify forward-looking statements.
Forward-looking statements are not statements of historical fact
and reflect CONSOL Energy's and Noble Energy's current
views about future events. Such forward-looking statements include,
but are not limited to, statements about CONSOL Energy's and
Noble Energy's plans, objectives, expectations and intentions, the
expected timing of completion of the transaction, and other
statements that are not historical facts, including business
strategy and other plans and objectives for future
operations. No assurances can be given that the
forward-looking statements contained in this press release will
occur as projected and actual results may differ materially from
those projected. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks and uncertainties
include, without limitation, the risk that CONSOL Energy
or Noble Energy may be unable to obtain regulatory
approvals required for the transaction, the risk that regulatory
approvals or restructuring of arrangements with third parties may
delay the transaction or result in the imposition of conditions
that could cause the parties to abandon the transaction, the risk
that a condition to closing of the transaction may not be
satisfied, the timing to complete the transaction, disruption from
the transaction making it more difficult to maintain relationships
with customers, employees or suppliers, the diversion of management
time on transaction-related issues, the volatility in commodity
prices for natural gas and crude oil, the presence or
recoverability of estimated reserves, the ability to replace
reserves, environmental risks, drilling and operating risks,
exploration and development risks, competition, government
regulation or other actions, the ability of management to execute
its plans to meet its goals and other risks inherent in CONSOL
Energy's and Noble Energy's businesses that are discussed
in CONSOL Energy's and Noble Energy's most recent annual
reports on Form 10-K, respectively, and in other CONSOL
Energy and Noble Energy reports on file with
the Securities and Exchange Commission . Forward-looking
statements are based on the estimates and opinions of management at
the time the statements are made. Neither CONSOL Energy nor
Noble Energy undertakes any obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
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SOURCE CONSOL Energy Inc.; Noble Energy, Inc.