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Contura Energy sells PRB assets to Blackjewel

Coal News - Published on Wed, 27 Dec 2017

Image Source: sec.gov
Contura Energy announced that executing a move that narrows its focus to eastern US operations and reduces reclamation obligations, Contura Energy said it plans to sell Contura Coal West LLC and related entities to Blackjewel LLC. The sale includes the Eagle Butte and Belle Ayr mines, which are located in Wyoming’s Powder River Basin, along with related coal reserves, equipment, infrastructure and other properties. Combined, the two mines shipped 24.5 million tons through the first three quarters of 2017, and Contura subsidiaries controlled approximately 600 million tons of proven and probable PRB reserves.

Under the terms of the transaction, Contura will receive deferred consideration of up to USD 50 million through various royalty payments. Blackjewel will assume all permit and reclamation obligations associated with the assets acquired, thereby eliminating approximately USD 200 million in undiscounted reclamation obligations for Contura. This transaction is expected to generate significant income tax deductions of approximately USD 400 million to USD 450 million for Contura, which would be available to offset taxable income in 2017 and future years. The company expects to incur a book loss on the sale, which will be recorded in the fourth quarter.

Mr Kevin Crutchfield, CEO, Contura Energy said that “This transaction allows us to further sharpen our focus on the company’s well-positioned eastern assets and a growing met sales portfolio.” He added that “[Blackjewel] is acquiring two solid mines with decades of minable reserves, a top-notch, professional workforce and a great operating track record.”

Contura’s production profile will now consist primarily of metallurgical coal mines in Central Appalachia and its underground, longwall thermal coal mine in Northern Appalachia. The company will still control nearly 700 million tons of proven and probable reserves in Northern and Central Appalachia and a 65% ownership interest in the Dominion Terminal Associates coal export terminal, located in Newport News, Virginia.

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Posted By : Nanda Koijam on Wed, 27 Dec 2017
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