NEW YORK (AP) — Consol Energy Inc. is selling several mines and coal reserves to Coronado IV LLC. for $420 million. It says it will also suspend its dividend as it continues to deal with declining energy prices.
Its shares rose more than 4 percent in morning trading Monday.
The company is selling its Buchanan mine in southwestern Virginia, its idled Amonate mine in southwestern West Virginia and southwestern Virginia and its greenfield Russell County coal reserves in Virginia. The deal also includes greenfield Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania. Overall, the deal includes about 400 million tons of proved coal reserves.
Consol and its peers have had to cut costs and spending as energy prices, including coal, natural gas and oil, continue declining. Proceeds from the sale will be used to pay debt.
"This is another significant event in the execution of Consol Energy's strategy, as well as a meaningful step in continuing to strengthen our balance sheet, said President and CEO said Nicholas J. DeIuliis.
The deal doesn't include gas rights, and Consol will retain the right to extract and sell gas at the mines and other properties.
Consol will suspend its regular dividend, beginning with the first declared dividend following the closing of the deal.
Its shares rose 36 cents, or 4.6 percent, to $8.20 in morning trading Monday. Its shares are down almost 75 percent over the past year.