By Ben Fox Rubin
Coal producer Alpha Natural Resources Inc. (ANR) agreed to sell
its 50% interest in its Alpha Shale Resources joint venture to Rice
Energy for $300 million in cash and stock.
Alpha and Rice Energy formed the venture in 2010 to develop a
portion of Alpha's Marcellus natural gas holdings in Greene County,
Penn.
Rice Energy was founded by former Blackrock Inc. (BLK)
energy-fund manager Daniel J. Rice III to develop natural gas
deposits. The firm on Monday separately submitted initial paperwork
with the U.S. Securities and Exchange Commission for a proposed
initial public offering.
Alpha said it will receive $200 million of Rice stock in the
planned IPO and $100 million in cash.
"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," said
Alpha Chief Executive Kevin Crutchfield.
He added that his company will continue to evaluate "all
possibilities for creating value from the balance of our Marcellus
position of approximately 10,000 acres."
Alpha will be entitled to appoint Mr. Crutchfield to Rice
Energy's board in connection with the Rice Energy IPO.
The transaction is expected to close concurrently with the
closing of the Rice Energy IPO.
Many coal companies have shut down mines in response to one of
the weakest markets for the fuel in decades, as low natural-gas
prices sap demand for coal. Alpha Natural has eliminated a chunk of
its workforce and shut mines as part of its shift away from
power-plant coal and toward higher-priced steel-making coal.
Alpha shares closed Friday at $6.57 and were up 2.9% premarket.
As of the close, the stock was down 33% so far this year.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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