OREANDA-NEWS. CONSOL Energy Inc. (NYSE: CNX) announced that it has entered into an agreement for the sale of its Buchanan Mine in southwestern Virginia and certain other metallurgical coal reserves to Coronado IV LLC for total consideration to CONSOL of $420 million, including $398 million cash payable at the closing.  The transaction is not subject to a financing condition and is being funded by Energy and Minerals Group (EMG), which is the management company for a series of specialized private equity funds.   EMG has approximately $16.5 billion of regulatory assets under management. 

"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. 

The agreement contains customary representations, warranties and covenants, among other provisions, including a customary escrow provision.  The completion of the sale is subject to customary conditions, including regulatory approvals.  The final purchase price is subject to a limited working capital adjustment.    

CONSOL expects to utilize transaction proceeds in order to pay down debt.  The transaction is expected to close in the first quarter of 2016.  

Also in conjunction with the sale, CONSOL Energy is realigning its dividend policy to further reflect the company's increased emphasis on growth.  Beginning with the first declared quarterly dividend after the transaction closes, CONSOL Energy intends to suspend its regular quarterly dividend. 

Deutsche Bank acted as financial advisor to CONSOL Energy, while Buchanan Ingersoll & Rooney PC and Steptoe & Johnson PLLC acted as legal counsel.

For additional details regarding the representations, terms, conditions and other provisions of the agreement, see the Form 8-K which CONSOL is filing today with the Securities and Exchange Commission.

The foregoing summary of the agreement is not complete and is subject to and qualified in its entirety by reference to the complete text of the agreement, a copy of which is being filed as an exhibit to the Form 8-K. 

About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based producer of natural gas and coal. The company is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CONSOL Energy deploys an organic growth strategy focused on rapidly developing its resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves.  The company's premium coals are sold to electricity generators and steel makers, both domestically and internationally. CONSOL Energy is a member of the Standard & Poor's 500 Equity Index.