CNX’s revenues and operating cash flows
For 3Q15, CONSOL Energy’s (CNX) total operating revenue was ~$814 million, or ~8%, lower when compared with 3Q14. The lower operating revenue in 3Q15 was the direct result of lower realized prices for natural gas and coal production. In 3Q15, CNX reported an OCF (operating cash flow) of ~$110 million, which was ~62% lower than its OCF of ~$293 million in 3Q14. The drop was due to the lower revenues reported.
CONSOL Energy’s free cash flow trend
As seen in the above chart, CNX reported negative free cash flows in 2015. In 3Q15, CNX reported an FCF (free cash flow) of about -$149 million. Due to the steep downward trend in energy prices, free cash flows of almost all S&P 500 (SPY) energy companies have declined in 3Q15. Bigger players like Pioneer Natural Resources (PXD), EOG Resources (EOG), and Occidental Petroleum (OXY) reported -$194 million, -$225 million, and -$64 million, respectively, in free cash flows in 3Q15.
FCF helps a company to enhance shareholder value, and can be used to pay dividends, buy back stock, or repay debt. FCF is calculated by subtracting capital expenditure, or capex, from OCF.
CONSOL Energy’s capex
In 3Q15 and the first nine months of 2015, CNX spent a total of ~$259 million and ~$895 million in capex, respectively.
CNX’s total capex in 2015 will be ~$1 billion, a reduction of ~33% from its total capex of ~$1.5 billion in 2014. In 2015, CNX expects to spend ~$800 million in capex for upstream operations and ~$200 million in capex for coal operations.
For 2016, CNX expects to spend $400 to $500 million in capex for upstream operations and $170 to $190 million in capex for coal operations.