By Tess Stynes
Dominion Resources Inc. (D) closed on deals with two natural-gas
producers to lease about 100,000 acres of Marcellus share rights
under several of its natural-gas storage fields in West
Virginia.
Dominion expects the move to result in payments of about $200
million over nine years, as well as royalties.
Natural-gas and coal producer Consol Energy Inc. (CNX) acquired
the gas drilling rights to nearly 90,000 of the acres, as well as
gas rights in the Marcellus Shale and the Upper Devonian formations
in the storage fields for as much as $190 million.
Dominion will retain the storage fields, but permit directional
drilling into the much deeper Marcellus shale formation.
Dominion and Consol also agreed to a 15-year contract to
transport 250,000 dekatherms a day from West Virginia to two
pipeline interconnections in Ohio--one to the Texas Eastern
pipeline and the other to the Rockies Express Pipeline--starting in
November 2016. Dominion also has contracts with other producers to
transport gas to interconnections in Ohio.
Noble Energy Inc. (NBL) , Consol's joint venture partner in the
Marcellus Shale, is exercising its right to participate at a 50%
level.
Dominion has also farmed out approximately 13,000 acres to
Triana Energy LLC.
Dominion shares closed Monday at $63.74 and Consol shares closed
at $37.10. Neither was active premarket.
Write to Tess Stynes at tess.stynes@wsj.com
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