Noble Energy Inc. and CONSOL Energy Inc. have clinched their joint venture agreement to develop a swath of Marcellus Shale properties in southwest Pennsylvania and northwest West Virginia, the companies said Monday.
In August Noble agreed to pay CONSOL close to $1 billion for a one-half interest in 628,000 net undeveloped acres in three installments, of which the first is $327 million (see Shale Daily, Aug. 19). The Houston-based producer also acquired a 50% stake in CONSOL's existing Marcellus production and infrastructure for nearly $232 million. In addition, Noble agreed to fund about $2.1 billion of Pittsburgh-based CONSOL's future drilling and completions costs, which are expected to extend over an eight-year period.
"As we have worked with Noble Energy's team over the last six weeks to put this joint venture together, we have seen that we share similar corporate cultures -- with a strong commitment to safety and compliance -- and we share a common vision for the accelerated development of these assets," said CONSOL CEO J. Brett Harvey. "We are more confident than ever that this joint venture will create significant value for CONSOL Energy shareholders."
Noble paid a total of $593 million at closing, which included the first installment payment, the full amount for production and infrastructure, and customary adjustments for net cash between the effective date and closing. The second and final installments are to be paid on the first and second anniversaries of the closing, respectively.