On February 29, CONSOL Energy entered into an agreement to sell its Buchanan mine in southwestern Virginia and other metallurgical coal reserves to Coronado IV LLC for $420 million, including $398 million cash payable at the closing.
“This is another significant event in the execution of CONSOL Energy’s strategy, as well as a meaningful step in continuing to strengthen our balance sheet,” said Nicholas J. DeIuliis, president and chief executive officer. “The Buchanan mine fits into Coronado’s portfolio as a pure play metallurgical coal producer, and, in the end, this transaction bolsters the strategic position of both companies.”
Also included in the transaction are CONSOL Energy’s idled Amonate mine in southern West Virginia and southwestern Virginia, its greenfield Russell County coal reserves in southwestern Virginia and its greenfield Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania. The transaction includes approximately 400 million tons of proved coal reserves, which includes approximately 88 million tons associated with the Buchanan mine.
The transaction does not include any gas rights, and CONSOL will retain the right to extract and sell gas at the mines and other properties.
CONSOL expects to use the proceeds to pay down debt. The transaction is expected to close in the first quarter of 2016.