CNX Gas to buy Peabody's CBM, gas rights

By OGJ editors
HOUSTON, June 14 -- CNX Gas Corp., Pittsburgh, is buying the coalbed methane and gas interests of Peabody Energy Corp., St. Louis, for $66.5 million.

The acquisition totals 1,037,000 acres, including 654,000 acres in the Illinois basin, 153,000 acres in Northern Appalachia, 171,000 acres in the San Juan basin, 47,000 acres in the Powder River basin, and 11,000 acres in the Rockies. The deal boosts CNX Gas's gross acreage position 44% to 3.6 million acres.

No proved gas reserves are associated with the acreage, much of which must be evaluated to obtain an unproved reserves estimate.

The transaction involves three parties. CNX Gas will first acquire certain coal assets from CONSOL Energy Inc. for $45 million cash, plus a future payment with an estimated present value of $6.5 million. CNX Gas will then convey those coal assets plus $15 million cash to Peabody Energy in exchange for Peabody's CBM and gas rights.

The Illinois basin interests being acquired include 114,500 acres of conventional gas acreage with development potential in the Devonian New Albany shale. CNX Gas believes that this acreage alone holds at least 258 bcf of net unproved reserves. This and other action since the end of 2006 will increase CNX Gas's total proved and net unproved reserves 18% to 3.668 tcf.

CNX Gas recently doubled its position in the New Albany, where it is conducting an exploratory play known as Cardinal (OGJ Online, May 29, 2007). The company controls the leading CBM positions in the Central and Northern Appalachia and the Illinois basin.

Related Articles

Consol to stress gas output growth, sell five coal mines

11/05/2013 Consol Energy Inc., Pittsburgh, will emphasize Appalachian natural gas production growth and has arranged the $3.5 billion sale to a unit of Murray...

Synthesis licenses ExxonMobil's technology

09/30/2008 Synthesis Energy Systems (SES), Houston, signed a technology licensing agreement with ExxonMobil Research & Engineering Co. (EMRE) that provides SE...

ETNG starts service via new pipeline lateral

11/01/2006 East Tennessee Natural Gas LLC (ETNG), a unit of Duke Energy Gas Transmission, has placed into service its 32-mile Jewell Ridge pipeline, which wil...

Texas, Illinois make FutureGen short list

07/26/2006 Two sites in Texas and two sites in Illinois were named to the short list of candidates to host the $1 billion FutureGen power plant, a government-...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected