UPDATE 1-Consol, Noble Energy to form MLP for Marcellus pipelines

Thu Jun 12, 2014 8:51am EDT

(Adds background on region, MLP structure, stock movement)

June 12 (Reuters) - Consol Energy Inc and Noble Energy Inc said on Thursday they would form a master limited partnership (MLP) for pipeline operations they control in Pennsylvania's Marcellus shale region.

The move will give both companies cash to drill wells in the natural gas-rich Marcellus region and also give investors higher yields, though the MLP governance structure has been criticized by some as weaker and more confusing for investors than those of corporations.

Consol and Noble have confidentially filed paperwork for the MLP to launch an initial public offering. The confidential filing, made possible by a 2012 U.S. law designed to shield small companies from a media frenzy, enables the Securities and Exchange Commission to privately review the IPO documents before they are made public.

Twitter Inc took such a step in its 2013 filing, hoping to avoid the hype surrounding Facebook Inc's own filing.

Consol and Noble said they hope to have the Marcellus MLP launched by the end of this year. Both companies plan to control the MLP's general partner, an entity that effectively will serve as the parent to the publicly traded partnership, through their Cone Gathering LLC joint venture.

Cone Gathering will control a majority of the MLP's common units, which operate similar to shares.

Shares of Consol rose 2.1 percent to $48 in premarket trading on Thursday, while shares of Noble Energy had relatively light premarket trading around their Thursday close of $75.38. (Reporting by Ernest Scheyder; Editing by Chizu Nomiyama)

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