Alpha Natural Resources Sells 120 Gas Wells in WV

On Tuesday Alpha Natural Resources (ANR) announced it was divesting “substantially all of the assets” in two different operations in West Virginia, one of those being a natural gas operation with “120 producing natural gas wells in five counties.” Which got us digging. We recalled that ANR went bankrupt last year and ended up selling 27,400 acres of Marcellus/Utica Shale leases to Vantage Energy for $339.5 million (see Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres). That was all of ANR’s Marcellus assets. So what’s with this new deal to sell 120 gas wells in the Mountain State? And which five counties are the wells located in? The announcement didn’t say. So we reached out to ANR and got you some answers…
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Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres

Vantage Energy logoEarlier this year Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, filed for bankruptcy and announced it would sell off its Marcellus assets. ANR previously had a joint venture with Rice Energy (which Rice later bought out). Rice was also interested in the 27K acres ANR is selling as part of their bankruptcy–and made a “stalking horse” bid of $200 million for the assets (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). Other drillers objected to what they considered a sweetheart deal (see EQT, APP Challenge Rice Energy’s $200M Bid for ANR Shale Assets). In the end, Rice didn’t get it anyway. ANR announced yesterday that Vantage Energy won the bidding process–paying $339.5 million for the assets, “far exceeding” Rice’s bid…
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EQT, Rice Energy Deals Show Price per Acre for Leases Still High

money-bag.jpgYesterday MDN brought you the news that EQT has cut a deal to buy all of Norwegian Statoil’s operated Marcellus assets in West Virginia for $407 million (see EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M). One of MDN’s favorite energy analysts, Richard Zeits, writing on the Seeking Alpha website, does a close examination of the deal. We have a portion of this thoughts below. As part of Zeits’ deep dive on this deal, he takes a side road and compares how much EQT is paying per acre in this deal with the recently announced Rice Energy deal to purchase the Marcellus assets of bankrupt coal company Alpha Natural Resources (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). Zeits finds the per-acre price being paid by EQT is less than the Rice deal. But the real eye-opener is that the prices each are paying is still quite high–perhaps an indication that once unleased or expired lease acreage heats up again, prices will remain high…
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EQT, APP Challenge Rice Energy’s $200M Bid for ANR Shale Assets

auction-gavel.jpgTwo weeks ago MDN told you that Rice Energy had offered a “stalking horse” bid of $200 million for the shale assets of now-bankrupt coal company Alpha Natural Resources (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). ANR and Rice were joint venture partners for other shale acreage. Rice previously bought ANR out in that deal. So Rice and ANR are already buds. It appears part of the process in making a so-called stalking horse bid involves certain conditions and assurances (and payouts should someone else bid more). It’s all complicated financial stuff, not our specialty. But EQT and American Petroleum Partners (APP), two other Marcellus/Utica drillers, are also interested in ANR’s assets and apparently willing to bid at least as much as Rice. But because of these special conditions, bidding $200 million will cost them more than it will for Rice. So EQT and APP complained to the bankruptcy judge that Rice Energy is getting a sweetheart deal from ANR–a deal that should be canceled. The bankruptcy judge disagreed…
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Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets

Rice EnergyIn March MDN told you that Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, was throwing in the towel and calling it quits (see Alpha Natural Resources Selling Marcellus/Rice Energy Stake). In March ANR received what it called a “stalking horse bid” for the Marcellus acreage. It will come as no surprise that the bidder, as we learned yesterday, is none other than Rice Energy. Rice and ANR previously worked together on a joint venture. Yesterday Rice confirmed it has entered into a purchase agreement “to acquire Marcellus and Utica assets in central Greene County, Pennsylvania for $200 million in cash, subject to purchase price adjustments.” Rice also announced they will float a new round of stock in order to finance the $200 million purchase (see today’s companion story). Here’s the details on the Rice offer to buy ANR’s Marcellus/Utica assets…
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Rice Energy Floats New Round of Stock, Hopes to Raise $488M

Rice EnergyMDN’s lead story today is that Rice Energy has made a $200 million offer to buy the Marcellus/Utica assets from now bankrupt coal company Alpha Natural Resources (ANR). As you know, drillers like Rice (and every other driller on the planet) are currently in a cash crunch. Rice doesn’t have an extra $200M laying around ready to use for such a purchase. So in addition to the ANR deal announced yesterday, Rice also announced they will float another 29 million shares of common stock hoping to raise an additional $488 million, part of which will go for the ANR acreage purchase. What happens if Rice doesn’t consummate the ANR acreage deal? They’ll use the money raised from this new stock offering “for general corporate purposes”…
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Alpha Natural Resources Selling Marcellus/Rice Energy Stake

As we told you a month ago, Alpha Natural Resources, Inc., one of the largest metallurgical coal producers in the world, has been offered $500 million for the company’s major assets–its crown jewels (see Bankrupt Alpha Natural Resources Offered $500M for Assets). Among those assets is 25,000 acres of Marcellus gas leases in Greene County, PA and a stake in Rice Energy. We now have more details. Yesterday Alpha filed a proposed Chapter 11 bankruptcy plan that lays out selling the company’s best assets, keeping a few assets so it can cover the cost of reclaiming certain coal mining operations. In essence the company is throwing in the towel and calling it quits…
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Bankrupt Alpha Natural Resources Offered $500M for Assets

AlphaLogoLast August MDN told you that Alpha Natural Resources, one of the largest metallurgical coal producers in the world, had filed for bankruptcy. We also told you that Alpha is a driller in the Marcellus Shale–drilling on its own land and as part of a joint venture with Rice Energy (see Alpha Natural Resources in Bankruptcy – What about Marcellus?). Alpha owns 30 producing Marcellus Shale gas wells in PA. We mused at the time: What does the Alpha bankruptcy mean for its Marcellus drilling program? Bankruptcy proceedings have proceeded and it appears most of the company’s assets, including the shale wells, are on the auction block. A group of “unspecified lenders” have offered $500 million. Others can now make their bids by March 28…
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Alpha Natural Resources Does NOT Own Nearly Half of Rice Energy

It’s not often we get to set the record straight on a story run in the financial press–but we get to this time. A story appeared yesterday on the American Banking & Market News site that coal company Alpha Natural Resources (ANR), which has a joint venture with Rice Energy to drill in the Marcellus Shale, owns 42.8% of Rice Energy’s outstanding common shares of stock. Which made our eyeballs nearly fall out. How in the world could a coal company that filed for bankruptcy earlier this year (see Alpha Natural Resources in Bankruptcy – What about Marcellus?), own that much of Rice Energy? It made no sense to us. So we went digging. The story quotes from an extensive filing by ANR with the Securities and Exchange Commission. The 13D/A filing appears to make the claim that ANR owns 54,306,610 shares of Rice Energy (see below). However, if you read it closely, the language is dense and even misleading. We believe what it means to say is that ANR along with Rice Energy Holding, Rice Energy Family Holdings, and NGP Rice Holdings–all of them together–own 54,306,610 shares of stock. NOT just ANR by itself. We think the author of the story misinterpreted what is very obscure financial language. We reached out to Rice Energy and Rice’s president Toby Rice responded that he believes (is not 100% sure) that ANR owns less than 4 million shares of stock in Rice Energy
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Top Exec for Bankrupt Alpha Natural Res. Quits, Finds Another Job

I QuitIt was only three weeks ago that MDN reported Alpha Natural Resources, a coal company driven into bankruptcy by Barack H. Obama’s draconian EPA, filed for bankruptcy (see Alpha Natural Resources in Bankruptcy – What about Marcellus?). Alpha, as we noted, has dipped its toe into the Marcellus with a couple of joint ventures, in an attempt to diversify. But is it too late for the company? Who knows. What we can tell you is that one of their top executives, Brian Sullivan, who was the acting executive vice president and chief commercial officer, quit last week “in order to pursue another employment opportunity”…
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Alpha Natural Resources in Bankruptcy – What about Marcellus?

Virginia-based coal miner Alpha Natural Resources Inc. filed for bankruptcy protection on Monday. Thank you President Obama for driving yet another coal company into bankruptcy. But the story doesn’t end there. Alpha is not going anywhere–not yet any way. And there is an important tie-in with the natural gas industry. Alpha is also a driller in the Marcellus Shale–drilling on its own land and as part of a joint venture with Rice Energy. What does the Alpha bankruptcy mean for its Marcellus drilling program?…
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Rumor Mill: Alpha Natural Res. to File for Bankruptcy Next Month

rumor-mill.jpgJust a few weeks ago MDN brought you the news that coal company Alpha Natural Resources is expanding their Marcellus Shale operation and would begin drilling within the next 30 days in the Marcellus Shale in Greene County, PA (see Alpha Natural Res. Expands in Marcellus, Drilling Begins in 30d). Was that bluster? Yesterday the Wall Street Journal reported that Alpha is in talks to get financing for filing for bankruptcy next month…
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Alpha Natural Res. Expands in Marcellus, Drilling Begins in 30d

Aaannnd, we're backCoal company Alpha Natural Resources is expanding their operation in the Marcellus Shale natural gas business. Yesterday Alpha announced its wholly-owned subsidiary, Pennsylvania Services Corporation (PSC), has purchased back a 50% interest in its natural gas exploration and production joint venture, Pennsylvania Land Resources Holding Company (PLR) from joint venture partner EDF Trading Resources (EDFTR) for $126 million. Alpha’s PSC subsidiary now becomes the the sole owner and operator of the PLR joint venture (which is no longer joint). Lots of acronyms of subsidiaries owning subsidiaries! Bottom line: Alpha can now control and expand a highly economic natural gas development program with 25,000+ net acres AND associated infrastructure–in the Marcellus Shale. Alpha’s EVP Brian Sullivan says they plan to begin drilling in their Marcellus acreage position (in Greene County, PA) in the next 30 days…
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Alpha Natural Resources Back in the Marcellus

Last December MDN reported that Alpha Natural Resources, a Virginia-based company and one of the country’s largest coal producers, had sold its Alpha Shale division with active Marcellus drilling in Greene County, PA to Rice Energy for $300 million (see Alpha Natural Resources Sells 50% Marcellus Stake to Rice Energy). We thought that was probably it for Alpha with respect to northeast shale drilling. But hold on, not so fast. What we weren’t aware of is that Alpha has a new joint venture with EDF Trading Resources and Alpha is drilling two wells this year in the Marcellus, with plans to drill another four next year…
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