CONSOL Energy offers IPO on coal assets
CONSOL Energy (ticker: CNX) announced today that it will offer 10 million common units as part of an initial public offering in CNX Coal Resources LP, which is expected to list on the NYSE as CNXC, according to a company press release. The underwriters of the offering will have a 30-day option to purchase up to an additional 1.5 million common units to cover over-allotments, if any.
The company expects units in the MLP to price between $19 and $21, according to SEC filings. This would put the gross proceeds of the IPO between $190 and $210 million. The offering represents a 42.2% limited partner interest in CNXC, or a 48.5% interest if the additional 1.5 million unit option is exercised. CONSOL will own the remaining interest and through its ownership of CNX Coal Resources GP LLC, the general partner of CNX Coal Resources, a 2% general partner interest and the incentive distribution rights to CNX Coal Resources.
The new company is starting off with a 20% undivided interest in and control over the Enlow Fork, Bailey and Harvey mines in Washington and Greene counties, reports the Pittsburgh Business Journal. CONSOL will also give CNXC a right of first offer for its Baltimore marine terminal, the Buchanan metallurgical coal mine in Virginia and a coalbed methane gas gathering system in West Virginia, Kentucky and Virginia.
CONSOL has 5.7 trillion cubic feet of proved natural gas reserves, including coalbed methane and shale beds. The company has approximately 13,000 net producing wells with operations in both the Marcellus and Utica shale plays, according to CNX. Of those, more than 4,000 are coalbed methane wells.
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