Massey sells reserve, projections fall

Washington (Platts)--3Oct2006

Massey Energy has cut 2006 production and per-ton sales projections and
increased per-ton cash cost projections since last issuing guidance in late
July. Also, the Central Appalachian producer has retained Goldman Sachs to
look at "any and all strategic options" regarding the future of the company's
assets, a Massey official told Platts Monday.

In a Monday announcement, Massey said it has sold a 5.5 million-short ton
block of steam coal reserves in Boone County, West Virginia, for $31 million
that was not in Massey's five-year mining plan. "Depending on the mining
technique employed, the reserve could yield up to 17 million tons of coal,"
Massey said in the statement.

The Massey official, Vice President of Investor Relations Katharine Kenny,
said Massey agreed not to release the name of the buyer, a privately held coal
company. "I can tell you that [mining] it was not in our five-year plan, and
we weren't doing anything up there," she said. "Bottom line, we don't know
what their mining plans are, but we suspect that they would start producing
relatively quickly. [Mining is] permitted for the 5.5 million tons that we had
on our books."

The West Virginia Department of Environmental Protection did not return a call
seeking mine-permitting information.

Massey will realize a $30 million pre-tax gain on the sale, $19 million after
tax.

This is an excerpt. For more news, request a free trial to Platts Coal Trader
at http://coaltrader.platts.com


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.