Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
The Virginia, USA-based coal producer has entered into an agreement to exchange its stake for $200 million of Rice Energy’s common stock in the latter’s planned initial public offering and $100 million in cash, it said on Monday December 9.
Alpha Natural Resources and Rice Energy entered into the 50/50 joint venture in 2010 to develop a portion of the former’s Marcellus natural gas holdings in Greene County, Pennsylvania.
“Alpha has committed approximately 7,500 acres (3,035 hectares) and about $30 million in cash to Alpha Shale and we believe that the transaction provides Alpha with an excellent return on our investment while also allowing us to retain significant upside,” the coal producer’s chairman and ceo Kevin Crutchfield said in a statement.
“Upon completion of the Rice Energy IPO, we will add a significant amount of cash to our balance sheet while also maintaining meaningful ownership position in the growth opportunities presented by the combined Rice Energy platform,” he said.
The transaction is expected to conclude concurrently with, and is contingent upon, the closing of Rice Energy’s IPO.
Alpha Natural Resources will exchange its 50% interest in its Alpha Shale Resources joint venture with US oil and gas exploration company Rice Energy for a consideration of $300 million.