Noble Energy Inc. agreed to form a joint venture partnership with Consol Energy Inc. for the development of Marcellus shale assets in southwest Pennsylvania and northwest West Virginia.
Closing, subject to customary adjustments and conditions, is expected by Sept. 30.
Operations are to be shared between the partners with Noble’s initial focus on the wet gas portion of the acreage.
Terms call for Noble to buy a 50% interest in 663,350 net undeveloped acres for $1.07 billion, payable in three equal annual installments beginning at closing.
Noble also will finance $2.13 billion of Consol's future drilling and completion costs over an 8-year period and limited to one third of Consol's drilling and completion costs with an annual cap of $400 million. This arrangement calls for a suspension of disproportionate funding at gas prices below $4/MMBtu.
Terms call for Noble to acquire a 50% interest in 70 MMcfd of gas equivalent of Marcellus production and systems for $219 million.