March 4, 2008
Reconsideration
Utility and coal player Consol Energy Inc.’s bid to re-roll up coalbed-methane producer CNX Gas Corp. may represent a new U.S. gas M&A trend, and further pressure on gas-acquisition prices. Anticipation of new carbon-constraint U.S. energy policy is driving it, Consol reports.
But a big bonus is greatly in play as well: New estimates of CNX’s Appalachian shale potential, including in the hot-topic Marcellus, and in the Chattanooga and Huron.
Consol rolled CNX out in a 144A offering in 2005 to explore and develop gas potential in Consol’s existing coalfield acreage in Appalachia. The stock began trading in January 2006 at about $22 a share, and has jumped from some $28 this January prior to the Consol news to an all-time high of $38 at press time.
Nick DeIuliis, CNX president and chief executive, says, "As recently as two and a half years ago, we didn’t fully appreciate the significance of our shale opportunities. Today, we estimate our Appalachian shale resources alone could range from 1.3- to nearly 5.2 Tcf (trillion cubic feet)."
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-- Nissa Darbonne
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