In hopes of continuing its planned Appalachia exit, Noble Energy Inc. (NYSE: NBL) reached an agreement on Dec. 15 with CNX Resources Corp. (NYSE: CNX) to sell its Marcellus midstream assets, quickly resolving a lingering legal dispute between the two companies.

In the agreement, CNX Resources will acquire Noble’s 50% interest in CONE Gathering LLC, which owns the general partner of CONE Midstream Partners LP (NYSE: CNNX), for $305 million cash. Noble will retain its 21.7 million common limited partner units in CONE Midstream with plans to divest them over the next few years, according to a company press release.

As a result of the transaction with CNX, Noble terminated its prior agreement to divest its entire Marcellus midstream holdings to Wheeling Creek Midstream LLC, a portfolio company of Quantum Energy Partners, for $765 million. That particular deal came under fire when CNX, which holds a 50% interest in CONE Gathering, filed a suit to enjoin Noble’s transaction with Wheeling Creek.

Under the prior agreement, Noble would have received a similar valuation for its stake in CONE Gathering of $330 million, according to estimates by Gordon Douthat, senior analyst with Wells Fargo Securities. Douthat added he considered the new agreement with CNX a “slight positive” for Noble.

“The price received by Noble appears to be slightly below what the company had previously agreed to with a prior buyer and total cash in the door is well below the original announcement. That said, we believe that removing the legal overhang and completing the sale of the general partner in a timely manner offsets, while not materially impacting balance sheet,” he said in a Dec. 15 report.

Throughout 2017, Noble pulled the lever on several divestitures as it worked to offset its $3.2 billion purchase of Clayton Williams Energy early in the year.

Noble’s acquisition of Clayton Williams, which closed April, boosted the company’s position in the Delaware Basin to nearly 120,000 net acres making it the second-largest acreage holder in the Delaware, said David L. Stover, chairman, president and CEO of Noble.

Shortly after closing the Clayton Williams acquisition, Noble said in May it would exit Appalachia with an agreement to sell all of its upstream Marcellus assets in northern West Virginia and southern Pennsylvania for $1.225 billion, including contingency payments. Proceeds from the sale expected to pay down essentially all of Noble’s debt borrowings resulting from the Clayton Williams transaction.

Noble has also continued to strengthen its balance sheet for 2018 with recently announced divestitures of Denver-Julesburg Basin assets and mineral and royalty interests across 20 states.

Following the Marcellus midstream transaction, CNX will own 100% of CONE Gathering, making CONE a single-sponsor MLP, which is expected to create “significant value” for CNX and CONE, said Nicholas J. Deluliis, CNX’s president and CEO.

“As the single sponsor of CONE, CNX will benefit from increased flexibility with respect to the scope and timing of midstream development, which will enhance the value of existing development and create future opportunities such as future dropdowns and gathering more CNX volumes including dry Utica,” Deluliis said in a statement.

The companies expect to close the transaction in early 2018, subject to customary terms and conditions.

Emily Patsy can be reached at epatsy@hartenergy.com.