Consol Energy, a diversified fuel producer in the Appalachian Basin, has acquired the Appalachian exploration and production business of Dominion Resources for approximately $3.48bn in cash.
Consol Energy said that the acquisition will give it a leading position in the strategic Marcellus Shale fairway by tripling its development assets to approximately 750,000 acres with the addition of Dominion’s approximately 500,000 Marcellus Shale acres in Pennsylvania and West Virginia.
J Harvey, president and CEO of Consol Energy, said: “We are very pleased to be able to complete the transaction within the time-frame we outlined. We believe this to be a strategically compelling addition to our business, which ultimately provides Consol Energy with a stronger position in natural gas to complement our already leading position in coal production in the Eastern US.”
the company expects its natural gas business to account for as much as 35% of its total annual revenue. The acquisition increases its total proved gas reserves by more than 50% from 1.9 trillion cubic feet to approximately 3 trillion cubic feet and doubles its potential gas resource base to approximately 41 trillion cubic feet.
Consol Energy acquires a total of 1.46 million oil and gas acres from Dominion, along with more than 9,000 producing wells that are expected to produce more than 41Bcfe in 2010, approximately 27Bcfe of which will be imputed to the company between May 1, 2010 and the end of the year.