Diversified fuel producer,
Consol Energy Inc
, (
CNX
) gave an insight into its operational results for the second
quarter of 2012. Consol's Gas Division recorded production growth
of roughly 10% to 37.3 billion cubic feet (Bcf) from 34.0 Bcf
produced in the year-ago period. The coal division produced 14.6
million tons during the quarter, which includes 1.1 million tons of
low volatile metallurgical coal. The company, which functions
primarily in Eastern United States made significant progress in
safety measures across its various business units.
The success of Console Energy's safety program can be attributed to
the adoption of safety measures and compliance to safety rules at
the company's Enlow Fork Mine and Buchanan Mine units, which
produced 2.6 million tons and 1.1 million tons of coal,
respectively. Additionally, the company's other mines functioned
without any unexpected disruptions. In terms of compliance across
the company's coal division, violations of safety regulations were
down 18% from the previous quarter. Consol Energy's overall coal
inventory surged sequentially by 0.2 million tons to 2.4 million
tons at the end of second quarter.
In its central Pennsylvania unit, the company completed the
drilling of its Gaut 4 pad in Westmoreland County at the end of the
second quarter. The company also witnessed record production of
17.9 million cubic feet (MMcf) per day of natural gas from its
Marcellus Shale well. In the Southwest unit, the company drilled a
total of 10 wells and initiated operations at 8 wells in the first
quarter. Currently, drilling operations are in swing in two rigs.
In northern West Virginia, the company drilled two wells on the
Phillippi 4 pad in Barbour County. During the quarter, the company
drilled a total of 17 Marcellus Shale wells, while using 18 wells
for production.
Consol Energy's closest competitor
Noble Energy Inc.
(
NBL
) is also strengthening its position in the Marcellus region and
has drilled 6 wells on its SHL-6 pad. The first sales are
expected at the end of this month.
The company persistently engages in joint venture deals to maintain
its growth momentum. Consol Energy's agreement with
Hess Corporation
(
HES
) enabled the development and completion of its first horizontal
well, the TUSC 3A in the western portion of Tuscarawas County,
Ohio.
Consol Energy's operational achievements in the quarter reaffirm
the strength of its security strategies, which enabled the company
to address compliance issues, eliminate unnecessary expenses and
increase production. Also, effective safety procedures will provide
positive assurances to the company's employees and augment
productivity.
For the third quarter, the company expects coal production to be
around 14-14.5 million tons, which includes 1.1 million tons from
the Buchanan Mine. The guidance assumes that some of its mines will
remain partly operational during the third quarter. In the gas
division, the company anticipates production for third quarter and
full year 2012 to be 40-42 Bcf and 157 - 159 Bcf, respectively.
Based in Canonsburg Pennsylvania, Consol Energy is a multi-fuel
energy producer as well as energy services provider, primarily
catering to the U.S. power producers. The company principally
operates two business lines: Coal and Natural Gas. Consol Energy
presently holds a Zacks#3 Rank, which translates to short-term Hold
rating.
CONSOL ENERGY (CNX): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
NOBLE ENERGY (NBL): Free Stock Analysis Report
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