Consol Energy Announces Utica Shale Deal

Southpointe-based Consol Energy Inc. announced today that it has entered into an agreement with Hess Corporation for the joint exploration and development of Consol's nearly 200,000 Utica Shale acres in Ohio for aggregate consideration of approximately $593 million.

"We are very pleased to have Hess Corporation as our partner in the Utica Shale," J. Brett Harvey, Consol's chairman and chief executive officer said. "Hess Corporation is a global integrated energy company that shares Consol's dedication to safety and compliance, and they bring strong technical and operational shale expertise to this joint venture. Those skill sets coupled with Consol's deep footprint and history in northern Appalachia result in a powerful combination that will benefit the eastern Ohio economy, strengthen the communities in which we operate, and provide more opportunity for our employees, and our respective companies. Together we will explore and delineate what could be a significant resource in a safe, efficient, and economical manner."

"Of the nearly 200,000 Utica Shale acres in Ohio, approximately 80,000 acres were acquired decades ago by Consol, while the remaining 120,000 acres were acquired last year as part of the Dominion E&P acquisition. Today's transaction with Hess helps CONSOL's shareholders to realize value from some of our legacy assets, as well as from assets that were acquired just 15 months ago," Harvey continued. "We expect a pre-tax gain on the transaction, before fees, of $59 million."

Hess Corp. officials also lauded the move.

"We are delighted with our entry into the Utica Shale, which enables us to build a strategic acreage position in an emerging unconventional play in the United States," said John Hess, chairman and chief executive officer of Hess Corp. "We believe that this acquisition offers significant potential for future growth in reserves and production with most of the land either owned in fee or held by production with high net revenue interests. We are honored to partner with Consol, which has a long history and an excellent safety and operating record in the Appalachian basin. We believe that together our companies will build a profitable business and deliver important economic benefits for the residents of eastern Ohio."