CONSOL Energy and Noble Energy Reach Agreement to Separate Marcellus Shale JV, W. Va. and Pa.

Published: November 1, 2016 |

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CONSOL Energy Inc. and Noble Energy, Inc. 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 percent 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.

“This agreement with Noble Energy to separate our joint venture is bitter sweet for CONSOL Energy,” said Nicholas J. DeIuliis, president and CEO of CONSOL Energy.

“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,” added Deluliis.

“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,” said David L. Stover, chairman, president and CEO of Noble Energy.

Prior to the exchange agreement, the joint venture collectively operated approximately 669,000 Marcellus acres. CONSOL Energy and Noble Energy, Inc. each held 50 percent 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 percent 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 percent 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.

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.

About CONSOL Energy
CONSOL Energy Inc. 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.

To stop by CONSOL Energy’s website, CLICK HERE

About Noble Energy
Noble Energy 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®.

To stop by Noble Energy’s website, CLICK HERE

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