Murray Energy owned the Crandall Canyon Mine in Utah, where a series of collapses in August 2007 killed six miners and three rescue workers.
Last year, Murray Energy's Genwal Resources Inc., which operated Crandall Canyon, pleaded guilty in U.S. District Court in Salt Lake City to two criminal violations of mandatory health and safety standards under the Federal Mine Safety and Health Act. Murray Energy has said the deaths were the result of a "tragic seismic event," and that the violations were not the cause of the collapse.
In its statement Thursday, Murray Energy said, "The focus at Murray Energy is on operating very safe coal mines, with a particular emphasis on fire protection and emergency preparedness.
"The health and safety of all of our employees is foremost," the company said.
For Pittsburgh-based CONSOL, the deal allows a greater focus on its increasing interest in the region's growing natural gas market. The mines being sold represent roughly half of CONSOL's annual production, but CONSOL is keeping its Bailey and Enlow Fork mines in Pennsylvania and its soon-to-be-opened BMX Mine, also in western Pennsylvania. Also, CONSOL will retain its Buchanan Mine in southwestern Virginia, and the Miller Creek Mining Complex in Mingo County.
CONSOL CEO J. Brett Harvey said completion of the Murray transaction allows his company to focus on achieving natural gas production targets for 2014 and a hoped-for 30 percent annual gas production growth in 2015 and 2016.
CONSOL said the total consideration paid in the transaction includes $850 million in cash paid at the closing and future payments expected to total nearly $184 million in value from the retention of a royalty on select reserves and tolling fees at CONSOL's Baltimore Terminal.
CONSOL is also "significantly de-levering its balance sheet" in the deal, with Murray Energy acquiring $2.4 billion of CONSOL balance sheet liabilities, including $2.1 billion for employee retirement benefits. Murray is also acquiring more than $940 million in CONSOL UMWA 197 Pension Trust obligations.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.