Consol Energy Inc., Pittsburgh, and Noble Energy Inc., Houston, have agreed to separate their 50-50 joint venture formed in 2011 for the exploration, development, and operation primarily of Marcellus shale properties in Pennsylvania and West Virginia (OGJ Online, Aug. 18, 2011).
An exchange agreement determines each firm will own and operate 100% interest in its properties and wells in two separate operating areas, with independent control and flexibility of the scope and timing of future development over its operating area. All acreage operated by the firms in their respective operating areas will remain fully dedicated to CONE Midstream Partners LP.
Prior to the split, the JV collectively operated 669,000 Marcellus acres. Consol and Noble each held 50% working interest. As of the effective date of the exchange agreement on Oct. 1, total flowing production to the JV was 1.07 bcfd of natural gas equivalent.
After the split’s completion, expected in the fourth quarter, Consol will operate 100% working interest in 306,000 Marcellus acres with associated production of 620 MMcfed. The majority of its acreage resides in Pennsylvania.
Noble will operate 100% working interest in 363,000 Marcellus acres with associated production of 450 MMcfed. The majority of its acreage resides in West Virginia.
Noble also will remit a cash payment of $205 million to Consol at closing. The exchange of properties and cash result in the elimination of the remaining outstanding carry cost obligation due from Noble to Consol.