CONSOL, Hess Close on Ohio Shale Agreement
CONSOL has closed on its previously announced agreement with Hess to jointly explore and develop CONSOL's nearly 200,000 Utica Shale acres in Ohio for aggregate consideration to CONSOL of approximately $594 million.
In the transaction, Hess Corporation acquired a 50% interest in nearly 200,000 Ohio Utica Shale acres owned by CONSOL in consideration for $594 million, of which $60 million was paid at closing. CONSOL and Hess Corporation have entered into a joint development agreement pursuant to which Hess Corporation will pay approximately $534 million in the form of a 1/2 drilling carry of certain CONSOL working interest obligations as the acreage is developed. Both the acreage and the consideration are subject to customary adjustment for revenues, expenses, and title matters. The effective date of the transaction is August 1, 2011.
"We are very pleased to have closed this, our second, joint venture agreement on schedule," commented J. Brett Harvey, CONSOL's chairman and chief executive officer. "Hess brings global integrated energy expertise to the Ohio Utica acreage. They share our dedication to safety and compliance and will help explore and develop this acreage on behalf of the stakeholders of both companies."
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