|Consol, the giant coal company, has purchased Dominion Resources Inc.'s natural-gas business for $3.48 billion, in an effort to diversify and mitigate the impact of potential carbon regulations.|
Dominion and Consol Energy announced the sale of Dominion's E&P operations to a subsidiary of Consol, expected to close by April 30, 2010.
Pittsburgh-based Consol will acquire 1.46 million acres from Dominion of Richmond, Va., and more than 9,000 wells.
Just how the sale will affect regional Dominion employees is not clear.
"Dominion Field Services marketed our production affiliate's gas, but Consol is expected to take over that marketing function soon after the closing," said Joseph Vanzant of Dominion Field Services, Inc.
"We have been asked if this sale to Consol will affect DFS and our function as a supply aggregator/marketer of Appalachian Basin gas. The answer is "No"," Vanzant said.
A press release said "DFS will continue providing our producer/customers the same services we have provided since DFS' predecessor began marketing operations in 1987. We will continue to be the largest aggregator of metered Appalachian Basin gas, will continue to actively seek new supplies and will continue to provide an array of services for our customers."
Consol is the fourth-largest U.S. coal producer.
It will become one of the largest participants in the Marcellus Shale formation, a huge gas field that lies 6,000 feet beneath parts of West Virginia, Ohio, Pennsylvania and New York.
Consol's acquisition follows a string of natural-gas deals, according to the Wall Street Journal.
Natural-gas drilling has increased in recent months in anticipation of higher demand and prices when the economy recovers, according to the Wall Street Journal.
Gas prices are down 21% so far this year to $4.39 per million.
Consol plans to increase natural-gas production to 350 billion cubic feet in 2015 from 142 billion cubic feet this year.
The company said it is also considering acquiring the 18.5% of shares of CNX Gas Corp. that it doesn't own, says the Wall Street Journal.