ANR to exchange interest in joint shale venture
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BRISTOL, Va. – Alpha Natural Resources Inc., a leading U.S. coal producer, on Monday announced that it has entered into an agreement to exchange its 50 percent interest in its Alpha Shale Resources Joint Venture with Rice Energy for $200 million of Rice common stock in Rice Energy’s planned initial public offering and $100 million in cash
Alpha and Rice Energy entered into the 50/50 joint venture in 2010 to develop a portion of Alpha’s Marcellus natural gas holdings in Greene County.
“We are very pleased with the value that has been created by this joint venture in such a short period of time. We believe this achievement is a testament to both the quality of our Marcellus acreage and the operational excellence of the Rice Energy team,” said Alpha Chairman and Chief Executrive Officer Kevin Crutchfield in a statement. He noted that ANR committed 7,500 acres and about $30 million in cash to Alpha Shale.
“Upon completion of the Rice Energy IPO, we will add a significant amount of cash to our balance sheet while also maintaining a meaningful ownership position in the growth opportunities presented by the combined Rice Energy platform,” he said.
Crutchfield also said ANR continues to evaluate all possibilities for creating value from the balance of its Marcellus position of approximately 10,000 acres.
The transaction is expected to close concurrently with the closing of the Rice Energy IPO.