How CONSOL Energy’s Production Volumes Are Changing



CONSOL Energy’s production in 3Q15

For 3Q15, CONSOL Energy’s (CNX) E&P (exploration and production) division’s total production of 86.1 Bcfe (billion cubic feet equivalent) was higher by ~33% when compared with 64.9 Bcfe from 3Q14.

For 3Q15, CNX’s coal division produced 7.3 million tons of coal, which is lower by ~6% when compared with 7.8 million tons from 3Q14.

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CNX’s production trend

As seen in the above chart, CNX’s total quarter-over-quarter E&P production volumes have been increasing since 1Q14, whereas its total coal production peaked in 2Q14 and has been on a decline since then. In the first nine months of 2015, CNX’s total E&P production volume rose by ~22%, whereas its total coal production fell by ~9%.

Clearly, CNX is experiencing a shift in its overall production trend with increasing natural gas volumes and decreasing coal volumes. Over the last ten years, CNX’s coal production has fallen ~50%.

CNX’s production guidance

For 2015, CNX increased its total E&P production guidance to a range of 325 to 330 Bcfe. For 2016, CNX is expecting ~20% YoY (year-over-year) growth in natural gas production. CNX expects this growth to come mainly from the Marcellus Shale and the Utica Shale. For its coal division, CNX is expecting 2015 sales in the range of 28.9 million to 29.9 million tons and 2016 sales in the range of 30.6 million to 33.4 million tons.

Other E&P companies that are active in the Marcellus Shale and are also expecting strong production growth in natural gas are Southwestern Energy (SWN), Range Resources (RRC), and EQT (EQT). The ETF ISE-Reverse Nat Gas Index Fund (FCG) generally invests at least 90% of its total assets in natural gas producers.

In the next part, we will look into CNX’s E&P production mix and realized prices for 3Q15.


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