Consol Energy Inc. (CNX:TSX) announced Thursday that it will sell Noble Energy (NBL:TSX) a stake of its ownership in the Marcellus shale holdings for $3.4 billion. This agreement will grant Noble Energy Inc. the ability to extract natural gas.
The partnership entails Noble Energy purchasing half of the wells and development rights that Consol has in the Marcellus shale, which is a gas field that reaches from West Virginia to New York, according to The Associated Press.
The $3.4 billion investment will involve $1.07 billion towards purchasing a 50 percent stake in Marcellus, Morningstar reports. Noble will assume 33 percent of the costs involved in drilling for roughly eight years, which should cost up to $2.13 billion.
Consol's chairman and chief executive officer J. Brett Harvey issued a statement saying that "this transaction affirms the value we saw in the Marcellus shale when we acquired Dominion's Appalachian exploration and production business just 15 months ago," according to The Associated Press.
As a result of the partnership, Noble and Consul plan on increasing the number of horizontal drilling rigs existing in the Marcellus formation from four at present to 16 by 2015, The New York Times reports.