Dominion to lease Marcellus drilling rights to Consol

|By:, SA News Editor

Consol Energy (CNX) acquires drilling rights to nearly 90K acres in West Virginia as well as the Marcellus Shale and Upper Devonian drilling rights to Dominion Resources' (D) gas storage fields for $190M.

Dominion will still own the storage fields but permit directional drilling into the much deeper Marcellus shale formation; Noble Energy (NBL), Consol's joint venture partner in Marcellus Shale drilling, will exercise 50% rights.

CNX says the deal could provide it with more than 350 lateral drilling locations as it accelerates its gas drilling in the next few years.

CNX also agrees to ship on Dominion's pipeline transmission system; the agreement is for 250K/day dekatherms to two eastern Ohio pipeline connections.