Consol Energy to acquire Appalachian assets of Dominion Resources for $3.475 billion

Consol Energy Inc., a US-based coal and gas producer said on Monday that it had entered into a deal to acquire the Appalachian exploration and production business of Dominion Resources, Inc. for $3.475 billion in cash in order to expand its natural-gas business.

Appalachia is home to approximately 23 million people and is a term used in the US to describe a cultural region in the eastern part of the US that stretches from western New York state to northern Alabama, Mississippi, and Georgia.

Pittsburgh, Pennsylvania-based Consol is the country's largest producer of high-Btu bituminous coal and has transformed itself from a single-fuel mining company into a multi-energy producer of both high-Btu coal and gas. Combining its coal and gas production, Consol provides two-thirds of the nation's power.

Richmond, Virginia-based Dominion Resources is a power and energy company that supplies electricity in parts of Virginia and North Carolina. It also supplies natural gas  to parts of West Virginia, Ohio, Pennsylvania, and eastern North Carolina.

The acquisition of Dominion's Appalachian exploration and production business, one of the oldest and most active drillers in Pennsylvania and West Virginia, will add to Consol's existing natural gas business which is operated through CNX Gas, its 83-per cent owned subsidiary.

Upon completion of the transaction, Consol said it will become the largest producer of natural gas in Appalachia, with about 386 million cubic feet of daily output, and its natural gas business will account for about 35 per cent of total revenue.