Consol Energy Inc.’s move to sell all five of its coal mines in West Virginia to Ohio-based Murray Energy for $3.5 billion on Monday is ensuring the company’s decision to focus its future in natural gas, said West Virginia University’s director of the Bureau of Business and Economics Research.

John Deskins, who heads up the bureau and is also an associate professor of economics in the College of Business & Economics, said the longwall coal mines Consol had in West Virginia were producing a steady stream of income, but they were mature.

“Consol wants to capitalize on the natural gas boom. Because they are mature, it’s a good time to sell the mines, get the cash and invest that into natural gas,” Deskins said. “Consol is switching their strategic focus to natural gas, and this will allow them to up their natural gas production.”

Christopher Bise, professor and Robert E. Murray Chair of Mining Engineering in WVU’s Benjamin M. Statler College of Engineering and Mineral Resources, said the sale will be a substantial increase in the amount of reserves that Murray Energy will now control.

“A lot of times mining companies, looking forward, will get reserves in close proximity to where their mines are located. Some other areas may be dwindling, so they could be looking for other locations to transfer workers,” he said.

“It’s a lot easier to buy existing mines because you already have the infrastructure in place, the entrance to the mine, etc. It’s easier than starting from scratch. From Consol Energy’s standpoint, they see it as an opportunity to expand their business in natural gas. From Murray Energy’s standpoint, they see the reserves to ensure that the company has a long-term future in the area.”

Deskins noted that the sale does not necessarily mean changes in workforce. “It doesn’t mean any mines are closing or hours will be cut or layoffs. The output in these mines that are being sold will be steady.”

Both professors are available to comment to media. Deskins is available to comment on the economics aspect of the purchase. To contact Deskins, email John.Deskins@mail.wvu.edu.

Bise is available to comment on the mining aspect of the purchase. To contact Bise, call (304) 293-3831 or email Chris.Bise@mail.wv.edu.

-WVU-

cn/10/29/13

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