Consol Energy and Noble Energy to dissolve Marcellus Shale JV

Consol Energy and Noble Energy formed their joint venture in 2011 to explore and develop gas fields in the Macellus Shale in Pennsylvania and West Virginia.

Consol Energy to receive $205 million on closing

Oct 31 (Reuters) – Coal and natural gas producer Consol Energy Inc and Noble Energy Inc said on Monday they would dissolve their 50-50 Marcellus shale joint venture, resulting in a payment of about $205 million to Consol on closing.

The joint venture was formed in 2011 to explore and develop about 669,000 acres in the Marcellus Shale in Pennsylvania and West Virginia. The venture produces the equivalent of about 1.07 billion cubic feet of gas per day.

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U.S. shale oil production is expected to fall for a 12th consecutive month in November, according to a U.S. government forecast, on the back of a two-year global rout in oil markets, leading several oil and gas companies to sell assets or revisit deals with other companies.

Canadian energy producer Enerplus Corp put its natural gas assets in the U.S. Marcellus shale region up for sale earlier this month, while Norwegian oil company Statoil sold its assets in the same region to EQT Corp early this year.

Noble and Consol said they would now own and operate wells in two separate areas where they would have independent control and flexibility over development.

The deal does not change the total acreage or gathering rates dedicated by Consol and Noble to Cone Midstream Partners LP, a limited partnership formed by the two companies to develop and acquire natural gas gathering and other midstream energy assets in the Marcellus shale.

Consol will control about 306,000 Marcellus acres with production of nearly 620 million cubic feet per day of natural gas equivalents, while Noble will control about 363,000 acres with production of about 450 million cubic feet per day of natural gas equivalents.

The deal is not subject to a financing condition and is expected to close in the fourth quarter of 2016, the companies said.

(Reporting by John Benny in Bengaluru; Editing by Ted Kerr and Martina D’Couto)