Diversified fuel producer
CONSOL Energy Inc.
) released production details for the third quarter of 2013.
CONSOL also provided fourth quarter production guidance and 2014
gas production estimates.
Q3 Production and Inventory
The third quarter performance was better than CONSOL's previous
estimation. CONSOL Energy's Gas division produced 46.1 billion
cubic feet equivalent (Bcfe) in the third quarter, up 17% from
39.5 Bcfe produced in the year-ago quarter. The gas production
surpassed the guidance of 43 to 45 Bcfe. The production was 19.4%
higher than 38.6 Bcf recorded in the second quarter.
Gas production in the third quarter included 491 million cubic
feet (MMcf) per day of natural gas, 397 barrels per day of
oil/condensates, and 1,340 barrels per day of NGL.
CONSOL Energy's Coal division produced 14.5 million tons in the
third quarter, including 1.1 million tons of low-vol coking coal
from the company's Buchanan Mine. The coal production in the
third quarter exceeded the guidance of 13.4-13.9 million tons.
Coal production was 5% higher than 13.8 million tons produced in
the second quarter.
CONSOL Energy's total coal inventory in the third quarter
increased 17.2% year over year to 1,075,000 tons. Thermal coal
inventory increased by 198,000 tons to 971,000 tons during the
quarter while low-vol coal inventory decreased during the quarter
by 40,000 tons to 104,000 tons.
CONSOL's fourth quarter 2013 gas production is expected to be
approximately 46-48 Bcfe. 2013 gas production is expected to be
in the range of 170-172 Bcfe, narrower than the prior guidance of
170 - 175 Bcfe.
CONSOL Energy expects fourth quarter 2013 total coal production
in the range of 13.6-14.0 million tons while 2013 coal production
is expected to range between 56.7-57.1 million tons.
CONSOL maintained its gas production guidance in the range of
210-225 Bcfe for 2014. The 2014 production guidance includes
liquids content of 7%-8% of the total.
The demand for natural gas is expected to increase, thanks to the
Climate plan from the U.S. President, followed by stricter
proposals from the U.S. Environmental Protection Agency (EPA) for
granting permission for setting up new coal power plants.
The company is taking adequate steps to increase its natural gas
production and will work with its partner
Noble Energy Inc
) in the Marcellus Shale to meet its 2014 gas production
CONSOL Energy incurred a loss in the second quarter as an
accident in its Blacksville No. 2 Mine during the second quarter
disrupted operations. It not only resulted in a decline in total
revenue but also led to expenses of $23.6 million, which impacted
the bottom line of the company.
CONSOL presently retains a Zacks Rank #5 (Strong Sell). However,
all operators in the sector are not doing as badly as CONSOL
Energy. The stocks worth considering in the space are Zacks
Ranked #2 (Buy)
James River Coal Co.
Peabody Energy Corp.
PEABODY ENERGY (BTU): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
JAMES RIVER CL (JRCC): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
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