Contura Energy Inc. announced Dec. 11 that it sold two Powder River Basin mines to Blackjewel LLC for deferred consideration of up to $50 million, leaving the company to focus on its remaining Appalachian assets.
According to a release, Contura subsidiary Contura Coal West LLC agreed to sell its Eagle Butte and Belle Ayr mines in Wyoming, along with related reserves, equipment, infrastructure and other properties to Blackjewel.
In the first three quarters of this year, the Eagle Butte mine produced about 12.8 million tons of coal, while the Belle Ayr facility produced about 11.7 million tons, according to data from the Mine Safety and Health Administration.
In addition to the $50 million, the deal included the assumption of all permit and reclamation obligations associated with the properties, which eliminated about $200 million in undiscounted reclamation obligations for the company. The sale is expected to generate $400 million to $450 million in tax deductions for the company, according to the release, but is expected to record a loss on the sale in the fourth quarter of this year.
Contura said it will now focus on its remaining assets in the Central and Northern Appalachian basins.
"This transaction allows us to further sharpen our focus on the company's well-positioned eastern assets and a growing met sales portfolio," said company CEO Kevin Crutchfield. "While these PRB thermal assets will not be part of our company's operational strategy moving forward, the purchaser is acquiring two solid mines with decades of minable reserves, a top-notch, professional workforce and a great operating track record."
Contura, which was spun out of the bankruptcy reorganization of Alpha Natural Resources Inc., canceled a planned IPO in August, saying market conditions would undervalue the company. The company reported net income of $10.2 million, or 93 cents per share, in the third quarter, compared with a loss of $45.8 million, or $4.44 per share, in the same quarter a year earlier.