CONSOL Energy (NYSE: CNX) announced April 1 that it has closed on its previously announced agreement to sell the Buchanan Mine in southwestern Virginia and certain other metallurgical coal reserves to Coronado IV LLC for total consideration to CONSOL of $420 million in value, including $402.8 million cash paid at the closing.
CONSOL Energy is a Pittsburgh-based producer of natural gas and a rapidly-shrinking producer of coal. The company is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin.
CONSOL had annnounced Feb. 29 that it had entered into an agreement for the sale of its Buchanan Mine and certain other metallurgical coal reserves to Coronado IV for total consideration to CONSOL of $420 million, including $398 million cash payable at the closing. The transaction is being funded by Energy and Minerals Group (EMG), which is the management company for a series of specialized private equity funds. EMG has approximately $16.5 billion of regulatory assets under management.
“This is another significant event in the execution of CONSOL Energy’s strategy, as well as a meaningful step in continuing to strengthen our balance sheet,” said Nicholas J. DeIuliis, President and Chief Executive Officer, on Feb. 29. “The Buchanan Mine fits into Coronado’s portfolio as a pure play metallurgical coal producer, and, in the end, this transaction bolsters the strategic position of both companies.”
Also included in the transaction are CONSOL Energy’s idled Amonate mining operation in southern West Virginia and southwestern Virginia, its greenfield Russell County coal reserves in southwestern Virginia and its greenfield Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania. The transaction includes approximately 400 million tons of proved coal reserves which includes approximately 88 million tons associated with the Buchanan Mine, which works the Pocahontas seam.
U.S. Mine Safety and Health Administration data shows that Buchanan produced 4.4 million tons in 2015 and 4 million tons on 2014.