Monday, 18 Jul 2011
It is reported that Coal producer Xinergy Corp has signed a long term supply agreement with JP Morgan Ventures Energy Corp in a deal that will significantly boost the company revenue.
Under the agreement a total of 2.16 million tonnes of thermal coal or 720,000 tonnes a year will be delivered from January 1 2012 through December 31 2014 from Xinergy Raven Crest/Brier Creek mines in West Virginia.
The Raven Crest property which covers 12,262 acres of land with its two surface mines and one highwall mine has 17.2 million tonnes of proven and probable reserves of which 5 million are permitted.
Xinergy said it will get a minimum of USD 170 million in revenue over the term of the agreement with significant upside based on future pricing indices. The pricing is variable based on index and under certain situations fuel cost adjustments.
New York based JP Morgan Ventures Energy is a subsidiary of JP Morgan Chase Funding which provides risk management solutions across commodity classes within the metal and energy sectors.
Mr Michael R Castle CFO of Xinergy said "This agreement is consistent with our plans to develop our Brier Creek underground reserves, significantly increase our thermal production in West Virginia, broaden our customer base and create shareholder value.”
(sourced from Proactiveinvestors)
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