Reports related to this article:
Project(s): View 5 related projects in PECWeb
Plant(s): View 5 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Murray Energy Corporation's (St. Clairsville, Ohio) deal to take controlling interest in Foresight Energy will create a company with more than 9 billion tons of coal reserves. Murray Energy, which already is the largest privately held coal-mining company in the U.S., announced March 15 it will acquire a controlling interest in Foresight Energy LP (NYSE:FELP) (St. Louis, Missouri) and Foresight Energy GP LLC (FEGP) (St. Louis, Missouri) for nearly $1.4 billion.
Murray Energy will acquire 80% voting interest in FEGP, with a 77.5% interest in the incentive distribution rights; about 50% of the limited partner interest in Foresight Energy, including all outstanding subordinated units; and access to certain other coal handling, transportation and transloading facilities. The deal is expected to close in second-quarter 2015. Foresight Energy will continue as a stand-alone public entity.
Murray Energy operates 12 mines in Northern Appalachia, the Illinois Basin and the Uintah Basin, with combined production of 62.8 million tons in 2014.
Foresight Energy is a major producer in the Illinois Basin Region, with four mining complexes and 3 billion tons of coal reserves. Its mining complexes have a combined production capacity of as much as 71.5 million tons per year, according to the company. Foresight Energy founder Christopher Cline will maintain a 22.5% equity interest in FEGP and about 35% interest in Foresight Energy.
Industrial Info is tracking Foresight Energy's grassroot Logan Mine No. 1 project at the underground Sugar Camp Energy Complex, which is located near Macedonia, Illinois. The project is part of Foresight Energy's expansion plan for the mining complex, which includes the addition of a third longwall, raising the Sugar Camp complex's production capacity to 15 million to 21 million tons per year, from the present 10 million to 14 million tons per year. The project, which has a total investment value ranging from $150 million to $200 million, would kick off in fourth-quarter 2015 and see completion in fourth-quarter 2017.
Industrial Info also is tracking Murray Energy's $45 million prep plant expansion at Benwood, West Virginia. The expansion would increase production capacity 38% to 1,850 tons per hour by adding a new module at the plant. Rock & Coal Construction Company (Sophia, West Virginia) is serving as the general contractor for the project, which kicked off in mid-2014 and is expected to reach completion in second-quarter 2015.
In late 2013, Murray Energy acquired five mines when it purchased Consolidation Coal Company from CONSOL Energy Incorporated (NYSE:CNX) (Pittsburgh, Pennsylvania).
The Foresight Energy deal comes at a time when the outlook is grim for the U.S. coal industry. The Energy Information Administration (EIA) said earlier this month that the use of coal for electric power will fall 2.2% this year, because of lower natural gas prices and retirements of coal power plants in response to federal air quality standards. As a result, the industry is likely to see a wave of consolidations, according to news media reports.
For related information, see March 19, 2015, article - Cheap Gas Undermines U.S. Coal
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Murray Energy will acquire 80% voting interest in FEGP, with a 77.5% interest in the incentive distribution rights; about 50% of the limited partner interest in Foresight Energy, including all outstanding subordinated units; and access to certain other coal handling, transportation and transloading facilities. The deal is expected to close in second-quarter 2015. Foresight Energy will continue as a stand-alone public entity.
Murray Energy operates 12 mines in Northern Appalachia, the Illinois Basin and the Uintah Basin, with combined production of 62.8 million tons in 2014.
Foresight Energy is a major producer in the Illinois Basin Region, with four mining complexes and 3 billion tons of coal reserves. Its mining complexes have a combined production capacity of as much as 71.5 million tons per year, according to the company. Foresight Energy founder Christopher Cline will maintain a 22.5% equity interest in FEGP and about 35% interest in Foresight Energy.
Industrial Info is tracking Foresight Energy's grassroot Logan Mine No. 1 project at the underground Sugar Camp Energy Complex, which is located near Macedonia, Illinois. The project is part of Foresight Energy's expansion plan for the mining complex, which includes the addition of a third longwall, raising the Sugar Camp complex's production capacity to 15 million to 21 million tons per year, from the present 10 million to 14 million tons per year. The project, which has a total investment value ranging from $150 million to $200 million, would kick off in fourth-quarter 2015 and see completion in fourth-quarter 2017.
Industrial Info also is tracking Murray Energy's $45 million prep plant expansion at Benwood, West Virginia. The expansion would increase production capacity 38% to 1,850 tons per hour by adding a new module at the plant. Rock & Coal Construction Company (Sophia, West Virginia) is serving as the general contractor for the project, which kicked off in mid-2014 and is expected to reach completion in second-quarter 2015.
In late 2013, Murray Energy acquired five mines when it purchased Consolidation Coal Company from CONSOL Energy Incorporated (NYSE:CNX) (Pittsburgh, Pennsylvania).
The Foresight Energy deal comes at a time when the outlook is grim for the U.S. coal industry. The Energy Information Administration (EIA) said earlier this month that the use of coal for electric power will fall 2.2% this year, because of lower natural gas prices and retirements of coal power plants in response to federal air quality standards. As a result, the industry is likely to see a wave of consolidations, according to news media reports.
For related information, see March 19, 2015, article - Cheap Gas Undermines U.S. Coal
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
