CONSOL to Spin Off Coal
CONSOL officials said that the thermal MLPís purpose will be to own interests in its mines and facilities in Pennsylvania including the Bailey, Enlow Fork and Harvey mines, along with its related preparation plant. The company is anticipating a mid-2015 initial public offering (IPO) for the MLP; post IPO, it plans to own the partnershipís general partner along with any incentive distribution rights and a majority of limited partner interests.
Additionally, CONSOLís board, citing a wish to create a more profitable financial structure, has approved the separate establishment of a subsidiary entity to encompass its metallurgical coal properties and related property, with the aim of conducting an initial public offering of up to 20% of the subsidiary's equity in the second half of next year.
The subsidiary's assets would include the Buchanan mine in Virginia and its related preparation plant as well as CONSOLís interest in the Western Allegheny Energy joint venture. Each business would have its own separate management teams.
Once complete, CONSOL will be mainly made up of: (1) its core oil and gas exploration and production business, (2) its interest in CONE Midstream Partners LP, (3) a controlling interest in its cash flow generating thermal coal MLP, and (4) a controlling interest in its metallurgical coal subsidiary.