Consol Energy Sells Powder River Basin Assets

Cloud Peak Energy Inc. (NYSE: CLD) bought non-producing northern Powder River Basin assets from Consol Energy Inc. (NYSE: CNX) for $170 million in cash.

Consol Energy has structured the transaction to retain an 8% production royalty interest on approximately 200 million tons of permitted fee coal. Its northern Powder River Basin assets consist of three separate parcels, including Youngs Creek Mining Company LLC and CX Ranch, both of which are 50% owned by Chevron, and additional related properties in and around Sheridan, Wyoming.

With this transaction, Consol Energy's asset divestitures for 2012 to date total $224 million. The company expects to deploy this cash towards its 2012 capital expenditure program, which includes both growth and maintenance projects. None of the assets sold in 2012 to date has generated revenue for Consol Energy.

Consol is a Pittsburgh-based producer of coal and natural gas with 12 bituminous coal mining complexes in four states and reports proven and probable coal reserves of 4.5 billion tons. Its natural gas acquisitions have transformed it from a pure-play coal bed methane producer to a full-fledged exploration and production company. Consol is a producer in the Marcellus Shale, has an active exploration program in the Utica Shale and has proved natural gas reserves of 3.5 trillion cubic feet. Cloud Peak Energy Inc. is a coal mining company based in Gillette, Wyoming.

The transaction is effective as of June 29, 2012.