(Adds background on region, MLP structure, stock movement)
June 12 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
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
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)