This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

CONSOL Energy Closes On The Sale Of Its Five West Virginia Longwall Coal Mines To Murray Energy

PITTSBURGH, Dec. 5, 2013 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) announced today that it has closed on its previously announced agreement to sell its Consolidation Coal Company (CCC) subsidiary, which includes all five of its longwall coal mines in West Virginia, to a subsidiary of Murray Energy Corporation (Murray Energy) for $3.5 billion in value.  The transaction was originally announced on October 28, 2013.   

(Logo: )

"The completion of this complex transaction this year," commented J. Brett Harvey, chairman and CEO, "enables us to enter 2014 with our focus of achieving our gas growth production targets of 210–225 Bcfe for 2014 and 30% annual gas production growth in 2015 and 2016."

The total consideration paid in the transaction includes $850 million in cash paid at the closing and future payments expected to total nearly $184 million in value resulting from the retention of a royalty on select reserves and tolling fees at CONSOL's Baltimore Terminal. CONSOL Energy is also significantly de-levering its balance sheet in the transaction, with Murray Energy acquiring $2.4 billion of CONSOL balance sheet liabilities. Additionally, Murray Energy is acquiring CONSOL's UMWA 1974 Pension Trust obligations, which have a present value of approximately $941 million. The cash purchase price is subject to a working capital adjustment, which is expected to be immaterial.

CONSOL Energy expects to record approximately $1.3 billion of pre-tax gain during the fourth quarter as a result of the transaction. The transaction is expected to generate a cash tax benefit to CONSOL Energy. In connection with the transaction, the company expects to reduce its administrative expenses by approximately $65 million per year. 

In connection with the closing of the transaction, for a transitional period CONSOL Energy will either guaranty certain of the commercial liabilities being assumed by Murray Energy in the transaction or will become the direct payee of Murray Energy for future payments. The value of the guaranties which CONSOL Energy will recognize in its financial statements is not expected to be material to the results of operations or the financial condition of CONSOL Energy.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs