Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Consol's Natural Gas Production Climbs in First Quarter

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Consol's Natural Gas Production Climbs in First Quarter

Article excerpt

Consol Energy's profit slipped in the first quarter, a period marked by low commodity prices and budget cuts, even as the company increased natural gas production from the Marcellus and Utica shale plays.

Cecil-based Consol reported net income of $79 million, or 34 cents per diluted share, for the quarter. That's down from $116 million, or 50 cents per share, during the same period last year, which included a loss from discontinued operations of $6 million.

Overall, the company's natural gas division produced 71.6 billion cubic feet equivalent, a 48 percent year-over-year increase, driven by the company's operations in the Marcellus. The company's annual production guidance remains at 30 percent growth for 2015 and 20 percent for 2016.

Consol's Marcellus production during the quarter jumped 75 percent to reach 36.3 Bcfe.

Meanwhile, the company has reduced its costs to drill. Consol's Marcellus costs were $2.62 per thousand cubic feet equivalent, which is a 56-cent improvement from the first quarter of 2014.

"We're seeing strong wells and continue to make big strides on efficiency improvements on both the drilling and completion sides of the equation," Nicholas DeIuliis, president and CEO, told analysts Tuesday morning.

In the Utica, production clocked in at 9.5 billion cubic feet equivalent, up from 1.2 Bcfe in the year-earlier quarter. Utica costs were $2.48 per thousand cubic feet equivalent.

In addition, Consol has slashed its capital budget by 30 percent compared to last year's $920 million. It had announced earlier this month that it would pare down its workforce.

"Throughout the quarter we have continued to refine, and reduce, our 2015 [exploration and production] budget, while high-grading our development plan to maximize our rates of return in what continues to be a challenging commodity price environment," Mr. DeIuliis said.

"We continue to focus on areas within our control: driving drilling and completion efficiencies to lower capital and operating costs, working with our service providers to better align terms with current market conditions, and prudently maintaining a strong balance sheet and liquidity position. …

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