TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Consol acquires drilling rights from Dominion

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

By Timothy Puko
Tuesday, Dec. 10, 2013, 12:51 p.m.
 

Consol Energy Inc. will pay $190 million to Dominion Resources Inc. for drilling rights on land in West Virginia, the companies announced on Tuesday.

Dominion will let Consol drill on 90,000 acres it controls for storage fields in Lewis and Harrison counties. Consol said the deal could produce about 350 drilling spots, and about half of the land probably will have wet gas, meaning it contains other hydrocarbons such as ethane and propane that often fetch a higher price than natural gas.

Consol has acquired large tracts of drilling rights in the past year — including at Pittsburgh International Airport and Ryerson Station State Park — as it ramps up drilling operations. It sold five West Virginia coal mines last week to help it raise money to support a shift from coal mining to gas drilling.

“This transaction reinforces Consol Energy's commitment to being a leading natural-gas producer in the Appalachian Basin,” Chairman and CEO J. Brett Harvey said in a statement announcing the deal. “These parcels represent what could be the largest untapped contiguous acreage in the southern core of the Marcellus shale.”

Dominion, which sold Consol 500,000 acres for $3.5 billion in March 2010, got a commitment from Consol to be the anchor shipper on Dominion's transmission pipeline system as part of the deal. Dominion announced that it has commitments to ship 500,000 dekatherms per day of natural gas westward from West Virginia, half of which will come from the agreement with Consol.

In the next year, there is likely to be an increasing amount of gas shipped from the Marcellus shale westward, Robert W. Baird & Co. Inc. advised investors in notes about the deal.

Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or tpuko@tribweb.com.

Subscribe today! Click here for our subscription offers.

 

 
 


Show commenting policy

Most-Read Business Headlines

  1. MSA Safety products in demand to protect workers in dangerous jobs
  2. U.S. Steel warns it may lay off almost 2,000 workers in Alabama, Texas
  3. Emergency room visits decline as navigators steer patients to proper medical care
  4. Drillers bid millions for oil, gas beneath West Virginia public lands
  5. Chevron laying off 162 workers from Moon-based unit
  6. Energy companies vie for experienced workers with skills in high demand
  7. Shale sector won’t gut area workforce
  8. Drops in gasoline prices won’t likely last, analysts say
  9. Milk industry swats back at ‘anti-dairy’ trend
  10. Energy-saving tactics pay off in Green Workplace Challenge
  11. Energy industry says it’s on top of methane leaks, but environmentalists want oversight