Consol loses drill carry as gas prices take a hit

** ADVANCE FOR WEEKEND EDITIONS, MARCH 4-5 ** A drilling rig stands over a natural gas well near Interstate 70 west of Rifle, Colo., in this photograph taken on Wednesday, Jan. 25, 2006. Energy companies hunting for natural gas are snapping up land all around them, either through old oil shale claims or through federal auctions. (AP Photo/David Zalubowski)

Shift: drilling for natural gas in the US has dropped as operators move into oil plays

DAVID ZALUBOWSKI

By Noah Brenner Houston

 13 January 2012 02:05 GMT

US conglomerate Consol Energy has lost a drilling carry worth almost $200 million this year from partner Noble Energy in the Marcellus shale play and has trimmed its operations plan there.

In August, Noble agreed to pay Consol $3.4 billion — $1.3 billion cash and a $2.1 billion drilling carry — for a 50% stake in Consol’s 665,000 acres that are primarily in the dry gas window of the Marcellus.

The change is due to a clause in the contract that allows Noble to automatically suspend the drilling carry if natural gas prices at Henry Hub drop below $4 for three consecutive months.

Consol said this week that it would spend about $575 million in Marcellus to drill 122 gross wells, down from the…

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