PITTSBURGH, Oct. 31, 2017 /PRNewswire/ -- CONSOL
Energy Inc. (NYSE: CNX) (CONSOL or the Company) announced today
that its board of directors has given final approval of the
Company's previously announced separation into two publicly-traded
companies--a coal company and a natural gas exploration and
production (E&P) company--and has declared a pro rata
distribution of all of the outstanding shares of CONSOL Mining
Corporation (CoalCo) common stock to the Company's
stockholders.
Distribution Ratio
On November 28, 2017, the expected
distribution date, CONSOL stockholders will receive one share of
common stock of CoalCo for every eight shares of CONSOL common
stock held as of the close of business on the record date of
November 15, 2017. No
fractional shares of CoalCo will be issued, and stockholders will
receive cash in lieu of fractional shares. The distribution
of CoalCo common stock will complete the separation of the coal
business from the Company. After the distribution, CoalCo will be
an independent, publicly-traded company and the Company will retain
no ownership interest.
Names and Stock Trading Symbols of the Post-Separation
Companies
In connection with the distribution, the current parent CONSOL
Energy will change its name to CNX Resources Corporation, and will
retain its ticker symbol "CNX" on the New York Stock
Exchange. At the same time, CoalCo will change its name to
CONSOL Energy Inc., and its common stock will trade on the New York
Stock Exchange under the ticker symbol "CEIX". CONSOL
stockholders will retain their shares of Company common stock, but
as a result of the name change, these shares will represent shares
of CNX Resources Corporation after the time of
separation.
In addition, CNX Coal Resources LP will change its name to
CONSOL Coal Resources LP. In connection with the name change,
CNX Coal Resources will also change its NYSE ticker symbol to "CCR"
from "CNXC", and its common units will continue to be listed on the
NYSE.
Trading of Common Stock
Beginning on or about November 14,
2017, and continuing up to and through the distribution
date, two markets are expected for CONSOL common stock: the
"regular-way" market and the "ex-distribution" market. Shares that
trade in the "regular-way" market will be entitled to shares of
CoalCo common stock distributed pursuant to the distribution;
shares that trade in the "ex-distribution" market will trade under
the symbol CNX WI and without an entitlement to shares of CoalCo
common stock distributed pursuant to the distribution. CoalCo
anticipates "when-issued" trading of its common stock will begin on
or about November 14, 2017, under the
symbol CEIX WI, and will continue up to and through the
distribution date. "Regular-way" trading in CoalCo's common stock
is expected to begin on November 29,
2017. CONSOL Stockholders who sell their shares of CONSOL
common stock in the "regular-way" market prior to November 29, 2017 will also be selling their
entitlement to receive shares of CoalCo common stock in the
distribution. Investors are encouraged to consult with their
financial advisors regarding the specific implications of buying or
selling Company or CoalCo common stock on or before the
distribution date.
Distribution of the CoalCo Stock
Distribution of the stock dividend of shares of CoalCo common
stock remains subject to the satisfaction or waiver of certain
conditions described in CoalCo's Registration Statement on
Form 10, as amended, including among others, the Securities
and Exchange Commission (SEC) declaring the Form 10
effective. A copy of the final Form 10, as amended, will be
available on the SEC website at www.sec.gov.
No action is required by CONSOL stockholders to receive shares
of CoalCo common stock in the distribution. CONSOL expects to mail
a notice of Internet availability of the information statement to
all stockholders entitled to receive the distribution of shares of
CoalCo common stock on or about November 3,
2017. The information statement is an exhibit to CoalCo's
Registration Statement on Form 10 that describes CoalCo, including
the risks of owning CoalCo common stock, and other details
regarding the separation and distribution.
Share Repurchase Program
On September 5, 2017, CONSOL's
board of directors approved a one-year share repurchase program of
up to $200 million, under which
approximately $81 million of its
common stock had been repurchased as of October 30, 2017, at an
average price of approximately $16.00 per share, through
a Rule 10b5-1 plan that will terminate on November 1, 2017. On October 30, 2017, the board approved an increase
in the aggregate amount of the repurchase plan to $450 million. CONSOL may determine, from
time-to-time, to effect repurchases through open market purchases,
Rule 10b5-1 plans, accelerated stock repurchases or derivative
contracts. The timing of any repurchases will be based on a number
of factors, including available liquidity, the Company's stock
price, the company's financial outlook, and alternative investment
options. The share repurchase program does not obligate the Company
to repurchase any dollar amount or number of shares and the Board's
authorization of the program may be modified, suspended or
discontinued at any time. The Board of Directors will continue to
evaluate the size of the stock repurchase program based on CONSOL's
free cash flow position, leverage ratio, and capital
plans.
About CONSOL
CONSOL Energy Inc. is a Pittsburgh-based energy producer, and one of
the largest independent natural gas exploration, development and
production companies, with operations centered in the major shale
formations of the Appalachian basin. The Company deploys an organic
growth strategy focused on developing its substantial resource
base. As of December 31, 2016, CONSOL had 6.3 trillion cubic
feet equivalent of proved natural gas reserves. CONSOL is a member
of the Standard & Poor's Midcap 400 Index. Additional
information may be found at www.consolenergy.com.
About CONSOL Mining
CONSOL Mining Corporation was formed in connection with the
separation to hold CONSOL Energy Inc.'s coal business.
Following the separation, CONSOL Mining Corporation will hold the
assets and liabilities of CONSOL Energy Inc. relating to (i) its
interests in the Pennsylvania Mining Complex, (ii) its interests in
CNX Coal Resources LP, (iii) its wholly-owned terminal in the Port
of Baltimore, and (iv) its
greenfield reserves and certain related coal assets and
liabilities.
Important Information about Company Names and Stock
Trading Symbols
Effective November 28, 2017,
the company known as CONSOL Energy Inc. (NYSE: CNX) expects to
separate its gas business (GasCo or RemainCo) and its coal business
(CoalCo or SpinCo) into two independent, publicly traded companies
by means of a separation of CoalCo from RemainCo.
- The gas business will be named CNX Resources Corporation
(RemainCo, GasCo or CNX) and will continue to be listed on the New
York Stock Exchange (NYSE), retaining the ticker symbol "CNX".
After the spin-off occurs, information regarding CNX and its
natural gas business will be available at
www.cnx.com.
- The coal business will be named CONSOL Energy Inc. (SpinCo,
CoalCo or CONSOL) and will be listed on the NYSE under a new ticker
symbol: "CEIX". CoalCo will own, operate and develop all of the
company's coal assets, including its interest in the Pennsylvania
Mining Complex, the Baltimore Marine Terminal, and approximately
one billion tons of greenfield coal reserves. After the spin-off
occurs, information regarding the new CONSOL Energy and its coal
business will be available at
www.consolenergy.com.
- The master limited partnership that is currently named CNX
Coal Resources LP (NYSE: CNXC) will change its name to CONSOL Coal
Resources LP and will trade on the NYSE under a new ticker symbol:
"CCR". CoalCo will own 100% of the general partner of CONSOL Coal
Resources LP (representing a 1.7% general partner interest), as
well as all of the incentive distribution rights and the common and
subordinated interests in CNX Coal Resources LP that are currently
owned by CONSOL Energy Inc. After the spin-off occurs, information
regarding CONSOL Coal Resources LP will be available at
www.ccrlp.com
Cautionary Statements
We are including the following cautionary statement in this
press release to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 for any forward-looking statements made by, or on behalf of
us. With the exception of historical matters, the matters
discussed in this press release are forward-looking statements (as
defined in 21E of the Securities Exchange Act of 1934 (the
"Exchange Act") that involve risks and uncertainties that could
cause actual results to differ materially from projected results.
Accordingly, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. The
forward-looking statements may include projections and estimates
concerning the timing and success of specific projects and our
future production, revenues, income and capital spending. When we
use the words "believe," "intend," "expect," "may," "should,"
"anticipate," "could," "estimate," "plan," "predict," "project,"
"will," or their negatives, or other similar expressions, the
statements which include those words are usually forward-looking
statements. When we describe strategy that involves risks or
uncertainties, we are making forward-looking statements. The
forward-looking statements in this press release speak only as of
the date of this press release; we disclaim any obligation to
update these statements. We have based these forward-looking
statements on our current expectations and assumptions about future
events. While our management considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, most of which are difficult
to predict and many of which are beyond our control. These risks,
contingencies and uncertainties may be applicable to either, or
both, of the GasCo and CoalCo following the separation and
distribution, and relate to, among other matters, the following:
uncertainties as to the timing and manner of the separation
and whether it will be completed; the possibility that various
closing conditions for the separation may not be satisfied; the
impact of the separation on our business; the expected tax
treatment of the separation; the risk that the coal and natural gas
exploration and production businesses will not be separated
successfully or such separation may be more difficult,
time-consuming or costly than expected, which could result in
additional demands on our resources, systems, procedures and
controls, disruption of our ongoing business and diversion of
management's attention from other business concerns; competitive
responses to the separation; deterioration in economic conditions
in any of the industries in which our customers operate may
decrease demand for our products, impair our ability to collect
customer receivables and impair our ability to access capital;
prices for natural gas, natural gas liquids and coal are volatile
and can fluctuate widely based upon a number of factors beyond our
control including oversupply relative to the demand available for
our products, weather and the price and availability of alternative
fuels; an extended decline in the prices we receive for our natural
gas, natural gas liquids and coal affecting our operating results
and cash flows; foreign currency fluctuations could adversely
affect the competitiveness of our coal and natural gas liquids
abroad; our customers extending existing contracts or entering into
new long-term contracts for coal on favorable terms; our reliance
on major customers; our inability to collect payments from
customers if their creditworthiness declines or if they fail to
honor their contracts; the disruption of rail, barge, gathering,
processing and transportation facilities and other systems that
deliver our natural gas, natural gas liquids and coal to market; a
loss of our competitive position because of the competitive nature
of the natural gas and coal industries, or a loss of our
competitive position because of overcapacity in these industries
impairing our profitability; coal users switching to other fuels in
order to comply with various environmental standards related to
coal combustion emissions; the impact of potential, as well as any
adopted environmental regulations including any relating to
greenhouse gas emissions on our operating costs as well as on the
market for natural gas and coal and for our securities; the risks
inherent in natural gas and coal operations, including our reliance
upon third party contractors, being subject to unexpected
disruptions, including geological conditions, equipment failure,
timing of completion of significant construction or repair of
equipment, fires, explosions, accidents and weather conditions that
could impact financial results; decreases in the availability of,
or increases in, the price of commodities or capital equipment used
in our coal mining and natural gas operations; obtaining and
renewing governmental permits and approvals for our natural gas and
coal operations; the effects of government regulation on the
discharge into the water or air, and the disposal and clean-up of,
hazardous substances and wastes generated during our natural gas
and coal operations; our ability to find adequate water sources for
our use in natural gas drilling, or our ability to dispose of water
used or removed from strata in connection with our gas operations
at a reasonable cost and within applicable environmental rules; the
effects of stringent federal and state employee health and safety
regulations, including the ability of regulators to shut down our
operations; the potential for liabilities arising from
environmental contamination or alleged environmental contamination
in connection with our past or current gas and coal operations; the
effects of mine closing, reclamation, gas well closing and certain
other liabilities; uncertainties in estimating our economically
recoverable natural gas, oil and coal reserves; defects may exist
in our chain of title and we may incur additional costs associated
with perfecting title for natural gas rights on some of our
properties or failing to acquire these additional rights may result
in a reduction of our estimated reserves; the outcomes of various
legal proceedings, including those which are more fully described
in our reports filed under the Exchange Act; exposure to
employee-related long-term liabilities; acquisitions and
divestitures we anticipate may not occur or produce anticipated
benefits; our participation in joint ventures may restrict our
operational and corporate flexibility, and actions taken by a joint
venture partner may impact our financial position and operational
results; risks associated with our debt; replacing our natural gas
and oil reserves, which if not replaced, will cause our natural gas
and oil reserves and production to decline; declines in our
borrowing base could occur for a variety of reasons, including
lower natural gas or oil prices, declines in natural gas and oil
proved reserves, and lending regulations requirements or
regulations; our hedging activities may prevent us from benefiting
from near-term price increases and may expose us to other risks;
changes in federal or state income tax laws, particularly in the
area of percentage depletion and intangible drilling costs, could
cause our financial position and profitability to deteriorate;
failure to appropriately allocate capital and other resources among
our strategic opportunities may adversely affect our financial
condition; failure by Murray Energy to satisfy liabilities it
acquired from us, or failure to perform its obligations under
various arrangements, which we guaranteed, could materially or
adversely affect our results of operations, financial position, and
cash flows; information theft, data corruption, operational
disruption and/or financial loss resulting from a terrorist attack
or cyber incident; operating in a single geographic area; certain
provisions in our multi-year coal sales contracts may provide
limited protection during adverse economic conditions, and may
result in economic penalties or permit the customer to terminate
the contract; a majority of our limited partner interests in CNX
Coal Resources LP and CONE Midstream Partners LP are subordinated,
and we may not receive distributions from CNX Coal Resources LP or
CONE Midstream Partners LP; with respect to the sale of the
Buchanan and Amonate mines and other coal assets to Coronado IV LLC
– any disruption to our business, including customer, employee and
supplier relationships resulting from this transaction, and the
impact of the transaction on our future operating results; with
respect to the termination of the joint venture with Noble -
disruption to our business, including customer and supplier
relationships resulting from this transaction, and the impact of
the transaction on our future operating and financial results and
liquidity. Additional factors are described in detail under
the captions "Forward Looking Statements" and "Risk Factors" in our
annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as
supplemented by our quarterly reports on Form 10-Q, and the factors
described under the captions "Cautionary Statements Regarding
Forward Looking Statements" and "Risk Factors" in the Form 10 filed
with the SEC by CONSOL Mining Corporation, on July 11, 2017, as amended from time to
time.
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