PITTSBURGH, July 11, 2017 /PRNewswire/ -- CONSOL Energy
Inc. (NYSE: CNX) (Company) announced today the filing of a
registration statement on Form 10 with the U.S. Securities and
Exchange Commission (SEC), an important milestone in the Company's
previously announced plan to separate CONSOL Energy Inc. into two
publicly-traded companies: a coal company and a natural gas
exploration and production (E&P) company. The spin-off would
provide current shareholders ownership in two leading and focused
companies, each positioned to capitalize on distinct opportunities
for future growth and profitability.
"Today's filing represents a significant step towards completing
the Company's separation, with both entities being well capitalized
and free cash flow generating. This strategic separation will
enable both businesses to focus on their inherent strengths and
unlock value for their shareholders," commented Nicholas J. DeIuliis, the Company's President and Chief Executive Officer.
The initial Form 10, which was filed by CONSOL Mining
Corporation, a subsidiary of the Company that will hold the coal
business at the time of the spin-off, includes detailed information
about the coal business, including historical financial
information. The coal business will be comprised of the
Pennsylvania Mining Complex (consisting of the Bailey Mine, the
Enlow Fork Mine and the Harvey Mine and the related coal
preparation plant), the Company's ownership interest in CNX Coal
Resources LP, a publicly traded master limited partnership that
owns a 25% undivided interest in the Pennsylvania Mining Complex
(NYSE: CNXC), the coal export terminal at the Port of Baltimore, undeveloped coal reserves located
in the Northern Appalachian, Central Appalachian and Illinois basins, and certain related coal
assets and liabilities. The initial Form 10 is preliminary and
subject to change prior to completion of the separation.
As disclosed in the Form 10, Jimmy
Brock has been appointed as Chief Executive Officer of the
coal business and Katharine
Fredriksen as President of
the coal business. Effective August 2,
2017, David Khani will serve
as Chief Financial Officer of the coal business and Don Rush, a current Vice President of the
Company, will assume the role of Executive Vice President and Chief
Financial Officer of the Company. After the separation,
Nick DeIuliis will serve as the
President and Chief Executive
Officer of the E&P business and Don
Rush will serve as the Executive Vice President and Chief
Financial Officer of the E&P business.
About Jimmy Brock
Jimmy Brock currently serves as
the Chief Executive Officer of the coal business, the Chief
Operating Officer – Coal of the Company, and the Chief Executive
Officer and director of the general partner of CNX Coal Resources,
LP. With a career in coal spanning five decades, Mr. Brock's vast
operational and leadership experience in the industry will continue
to be an invaluable asset to the employees and shareholders of the
new coal business.
About Katharine
Fredriksen
Katharine Fredriksen, who
formerly served as the Senior Vice President for Diversified
Business Units and Environmental Affairs of the Company, has
assumed the role of President of
the coal business. Ms. Fredriksen has been responsible for the
management of the Company's health, safety and environmental
matters, including management of the Company's environmental legacy
coal liabilities. She also has had responsibility for overseeing
the operation of the company's Baltimore Marine Terminal and
Central Appalachian mining operations. Previously, Ms. Fredriksen
served in the George W. Bush administration as Assistant Secretary
and Principal Deputy Assistant Secretary for the Office of Policy
and International Affairs at the U.S. Department of Energy.
About David Khani
David Khani, Executive Vice
President and Chief Financial Officer of the Company, will assume
the same role with the newly formed coal entity effective
August 2, 2017. Mr. Khani joined the
Company in 2011 as Vice President of Finance where he played a key
role in the growth of the Company's E&P business and is deeply
involved in the ultimate separation of the coal and E&P
businesses. Before joining the Company, Mr. Khani served as the
Director of Research at FBR Capital Markets and Co. Mr. Khani
previously served as Managing Director and head of FBR's Energy and
Natural Resources Group covering the coal mining space.
About Don Rush
Don Rush, the Company's Vice
President for Energy Marketing, will assume the role of Chief
Financial Officer of the Company effective August 2, 2017. Having served in numerous
leadership roles during his career with the Company, Mr. Rush has
effectively guided the Company through every significant
transaction during its transformative journey into a pure play
natural gas exploration and production company, including the sale
of the company's five West
Virginia mines in 2013 and the dissolution of the Company's
Marcellus Shale joint venture with
Noble Energy, Inc. He currently oversees the Company's commercial
functions, including mergers and acquisitions, gas marketing and
transportation.
The Form 10 also contemplates that the coal business will
operate under the name CONSOL Energy Inc. after the spin-off, and
that the E&P company will operate under a new name that will be
announced at a later date.
The spin-off remains subject to the satisfaction of certain
conditions, including, among others, obtaining final approval from
the Company's Board of Directors and the SEC declaring the Form 10
effective. A copy of the initial Form 10 is available on the SEC
website at www.sec.gov and on the Investor Relations section of the
Company's website: http://investors.consolenergy.com/.
The Company remains committed to separating its coal and gas
businesses and expects to be in a position to complete the
separation as early as 2017.
Second Quarter 2017 Earnings Release and Conference Call
Schedule
Separately, the Company will issue its second quarter earnings
release at 6:45 a.m. Eastern Time on
Tuesday, August 1. This will be
followed by a conference call at 10:00 a.m.
Eastern Time. A live webcast will be available on the
'Investor Relations' page of the company's website,
www.consolenergy.com. Also, earnings call slides will be available
at 6:45 a.m. Eastern Time on
Tuesday, August 1, on the 'Investor
Relations' page of the company's website.
Cautionary Statements
Various statements in this release, including those that express
a belief, expectation or intention, are forward-looking statements
under federal securities laws including Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act") that involve
risks and uncertainties that could cause actual results to differ
materially from projected results. Accordingly, investors should
not place undue reliance on forward-looking statements as a
prediction of actual results. The forward-looking statements may
include projections and estimates concerning the timing and success
of specific projects, including the potential separation, and our
future production, revenues, income and capital spending. When we
use the words "believe," "intend," "expect," "may," "should,"
"anticipate," "could," "estimate," "plan," "predict," "project,"
"will," or their negatives, or other similar expressions, the
statements which include those words are usually forward-looking
statements. When we describe strategy that involves risks or
uncertainties, we are making forward-looking statements. The
forward-looking statements in this press release, if any, speak
only as of the date of this press release; we disclaim any
obligation to update these statements. We have based these
forward-looking statements on our current expectations and
assumptions about future events. While our management considers
these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most
of which are difficult to predict and many of which are beyond our
control. These risks, contingencies and uncertainties relate to,
among other matters, the following: uncertainties as to the timing
and manner of the separation (whether by sale or spin-off) and
whether it will be completed (including any dropdowns of the coal
business); the possibility that various closing conditions for the
separation may not be satisfied; the impact of the separation on
our business; the expected tax treatment of the separation; the
risk that the coal and natural gas exploration and production
businesses will not be separated successfully or such separation
may be more difficult, time-consuming or costly than expected,
which could result in additional demands on our resources, systems,
procedures and controls, disruption of our ongoing business
and diversion of management's attention from other business
concerns; competitive responses to the separation; deterioration in
economic conditions in any of the industries in which our customers
operate may decrease demand for our products, impair our ability to
collect customer receivables and impair our ability to access
capital; prices for natural gas, natural gas and other liquids and
coal are volatile and can fluctuate widely based upon a number of
factors beyond our control including oversupply relative to the
demand available for our products, weather and the price and
availability of alternative fuels; an extended decline in the
prices we receive for our natural gas, natural gas liquids and coal
affecting our operating results and cash flows; foreign currency
fluctuations could adversely affect the competitiveness of our coal
and natural gas liquids abroad; our customers extending existing
contracts or entering into new long-term contracts for coal on
favorable terms; our reliance on major customers; our inability to
collect payments from customers if their creditworthiness declines
or if they fail to honor their contracts; the disruption of rail,
barge, gathering, processing and transportation facilities and
other systems that deliver our natural gas, natural gas liquids and
coal to market; a loss of our competitive position because of the
competitive nature of the natural gas and coal industries, or a
loss of our competitive position because of overcapacity in these
industries impairing our profitability; coal users switching to
other fuels in order to comply with various environmental standards
related to coal combustion emissions; the impact of potential, as
well as any adopted environmental regulations including any
relating to greenhouse gas emissions on our operating costs as well
as on the market for natural gas and coal and for our securities;
the risks inherent in natural gas and coal operations, including
our reliance upon third party contractors, being subject to
unexpected disruptions, including geological conditions, equipment
failure, timing of completion of significant construction or repair
of equipment, fires, explosions, accidents and weather conditions
which could impact financial results; decreases in the availability
of, or increases in, the price of commodities or capital equipment
used in our mining and transportation operations; obtaining and
renewing governmental permits and approvals for our natural gas and
coal operations; the effects of government regulation on the
discharge into the water or air, and the disposal and clean-up of,
hazardous substances and wastes generated during our natural gas
and coal operations; our ability to find adequate water sources for
our use in natural gas drilling, or our ability to dispose of water
used or removed from strata in connection with our natural gas
operations at a reasonable cost and within applicable environmental
rules; the effects of stringent federal and state employee health
and safety regulations, including the ability of regulators to shut
down our operations; the potential for liabilities arising from
environmental contamination or alleged environmental contamination
in connection with our past or current natural gas and coal
operations; the effects of mine closing, reclamation, gas well
closing and certain other liabilities; uncertainties in estimating
our economically recoverable natural gas, oil and coal reserves;
defects may exist in our chain of title and we may incur additional
costs associated with perfecting title for natural gas and coal
rights on some of our properties or failing to acquire these
additional rights may result in a reduction of our estimated
reserves; the outcomes of various legal proceedings, which are more
fully described in our reports filed under the Securities Exchange
Act of 1934; exposure to employee-related long-term liabilities;
acquisitions and divestitures we anticipate may not occur or
produce anticipated benefits; our participation in joint ventures
may restrict our operational and corporate flexibility, and actions
taken by a joint venture partner may impact our financial position
and operational results; risks associated with our debt; replacing
our natural gas and oil reserves, which if not replaced, will cause
our natural gas and oil reserves and production to decline;
declines in our borrowing base could occur for a variety of
reasons, including lower natural gas or oil prices, declines in
natural gas and oil proved reserves, and lending regulations
requirements or regulations; our hedging activities may prevent us
from benefiting from near-term price increases and may expose us to
other risks; changes in federal or state income tax laws,
particularly in the area of percentage depletion and intangible
drilling costs, could cause our financial position and
profitability to deteriorate; failure to appropriately allocate
capital and other resources among our strategic opportunities may
adversely affect our financial condition; failure by Murray Energy
to satisfy liabilities it acquired from us, or failure to perform
its obligations under various arrangements, which we guaranteed,
could materially or adversely affect our results of operations,
financial position, and cash flows; information theft, data
corruption, operational disruption and/or financial loss resulting
from a terrorist attack or cyber incident; operating in a single
geographic area; certain provisions in our multi-year coal sales
contracts may provide limited protection during adverse economic
conditions, and may result in economic penalties or permit the
customer to terminate the contract; a majority of our common units
in CNX Coal Resources LP and CONE Midstream Partners LP are
subordinated, and we may not receive distributions from CNX Coal
Resources LP or CONE Midstream Partners LP; with respect to the
sale of the Buchanan and Amonate mines and other coal assets to
Coronado IV LLC - disruption to our business, including customer,
employee and supplier relationships resulting from this
transaction, and the impact of the transaction on our future
operating results; with respect to the termination of the joint
venture with Noble - disruption to our business, including customer
and supplier relationships resulting from this transaction, and the
impact of the transaction on our future operating and financial
results and liquidity; other factors discussed in the 2016 Form
10-K under "Risk Factors," as updated by any subsequent Form 10-Qs,
which are on file at the Securities and Exchange Commission. We
disclaim any obligation to update publicly any forward-looking
statements, whether in response to new information, future events
or otherwise, except as required by applicable law.
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SOURCE CONSOL Energy Inc.