Today CONSOL provided an operations update for the third quarter (which ended September 30, 2013) reporting production and sales of gas and coal exceeded expectations. Gas production was forecasted between 43-45 billions of cubic feet equivalent (bcfe), but the gas division produced 46.1 bcfe. This is an increase of 17% from gas production in the third quarter of 2012. The Coal Division produced 14.5 million tons for the third quarter of 2013 which exceeded projections of 13.4-13.9 million tons.
"Our gas production growth is beginning to accelerate as we and our Marcellus Shale partner expand the rig count. We now have a record 8 rigs drilling in the Marcellus Shale on our JV acreage. For 2014, we and Noble Energy expect to be operating at least this many rigs," commented J. Brett Harvey, chairman and chief executive officer. "Our rebounding rig count and our well results will, we believe, enable us to achieve our 2014 production guidance of 210 – 225 Bcfe, which represents a 22% – 30% growth rate over expected 2013 production."
CONSOL’s 2014 gas forecast projects a growth rate between 22-30 percent. They maintain a rate of zero safety exceptions and saw violations decrease from 11 to 4 from year to year comparisons of the third quarter. The gas division is forecasting four segments of operations: Marcellus Shale Dry Gas (CONSOL Energy-operated); Marcellus Shale Wet Gas (Noble Energy-operated): Ohio Utica Shale (CONSOL-operated); and Ohio Utica Shale (Hess-operated).
“During the third quarter, CONSOL Energy drilled 15 horizontal shale wells: 12 Marcellus Shale and three Utica Shalewells. The average drilled lateral length for the Marcellus Shale wells and the Utica Shale wells was 8,817 feet and 9,893 feet, respectively. CONSOL completed 21 Marcellus Shale wells and three Utica Shale wells in the third quarter. Also, CONSOL turned in line 22 Marcellus Shale wells in the third quarter.”
Currently CONSOL Energy Inc. (NYSE:CNX) is trading at 38.54 with a 52 week range of 26.25-39.23. With a beta measured at 1.5, it is expected to move on average at 1.5 times the market return.
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