Today CONSOL Energy announced ownership of 90,000 continuous acres of gas drilling rights acquired from Dominion Transmission for $190 million in Lewis County, West Virginia and Harrison County, West Virginia. CONSOL Energy Inc. is a natural gas producer in the Appalachian Basin, and Dominion Transmission is part of power and energy company Dominion Resources headquartered in Richmond, Virginia. The $190 million will be paid in two installments: $50 million at closing last week and with payments of the remaining balance due when acre are drilled. It is estimated the approximately half of the acres have wet gas.
The difference between wet and dry gas is the processing and area. Dry gas has methane in it but not much else and can be considered just gas. Wet gas has methane, butane and ethane which can be separated and sold. For example ethane can be converted into ethylene and used to produce plastics. In Pennsylvania, dry gas is typically found in north central and northeast parts of the state while wet gas is found in the southwest part. Shell is considering Monaca, Pennsylvania in Beaver County (wet gas) as a site location to build an ethane cracker plant.
"This transaction reinforces CONSOL Energy's commitment to being a leading natural gas producer in the Appalachian Basin," continued Mr. Harvey. "These parcels represent what could be the largest untapped contiguous acreage in the southern core of the Marcellus Shale. They complement our already significant acreage position in Northern West Virginia. As CONSOL Energy accelerates its gas drilling in the next few years, and continues to improve its efficiency through enhanced production techniques, we believe this transaction could provide us with more than 350 risked long lateral Marcellus Shale drilling locations."
CONSOL Energy Inc. (NYSE:CNX) is currently averaging a closing price of 36.41 in the last month of the fourth quarter. The average closing price for 2013 is 33.05 while the average closing price for 2012 was 32.66. In 2012, the first through fourth quarter had an average closing price of 35.32, 31.24, 30.88 and 33.26. In 2013, the average closing price in the first through third quarters is 32.12, 33.03 and 31.36.
Check out the video for a dividend report on November 1, 2013 for CONSOL's third quarter earnings.
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