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How Was CONSOL Energy’s 2Q16 Operational Performance?

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CONSOL Energy’s 2Q16 operational performance for E&P division

For 2Q16, CONSOL Energy’s (CNX) E&P (exploration and production) division reported total production of ~99.3 Bcfe (billion cubic feet equivalent), which is higher by ~32% when compared with its 2Q15 production of ~75.5 Bcfe. Sequentially, CONSOL Energy’s 2Q16 production is higher by ~2% when compared with 1Q16.

CONSOL Energy’s 2Q16 production growth came from the Marcellus Shale and the Utica Shale. Range Resources (RRC) and Southwestern Energy (SWN) also operate in the Marcellus Shale. Range Resources (RRC) has reported a ~5% sequential increase, whereas Southwestern Energy (SWN) has reported a ~5% sequential decrease in their 2Q16 productions. Exco Resources (XCO) and Chesapeake Energy (CHK) also operate in the Marcellus Shale. The ISE-Revere Nat Gas Index Fund (FCG) invests in natural gas producers, whereas the Vanguard Energy ETF (VDE) invests into the broader energy market.

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CONSOL Energy’s 2Q16 operational performance for coal division

For 2Q16, CONSOL Energy’s Pennsylvania Operations reported coal production of ~6 million tons, an increase of ~2% when compared with 2Q15 production of ~5.9 million tons. For 2Q16, CONSOL Energy’s Pennsylvania Operations reported coal sales of ~6.2 million tons, an increase of ~9% when compared with 2Q15 coal sales of ~5.7 million tons.

For 2Q16, CNX’s Pennsylvania Operations reported coal production costs of $34.46 per ton, a reduction of ~22% when compared with 2Q15. Despite lower coal production costs, CONSOL Energy’s Pennsylvania Operations reported cash flow before capital expenditure of ~$78 million, which is ~30% lower when compared with 2Q15. This was mainly due to lower realized prices for its coal production.

CONSOL Energy’s Pennsylvania mining complex is managed and operated by CNX Coal Resources (CNXC). CNX Coal Resources is a growth-oriented master limited partnership sponsored by CONSOL Energy. CNXC’s assets include a 20% undivided interest in and operational control over CONSOL Energy’s Pennsylvania mining complex. For 2Q16, CNXC declared cash distributions of $0.51 per unit to the partnership’s common unit holders.

CONSOL Energy’s 2016 production guidance

CONSOL Energy increased its E&P division’s 2016 production guidance to a range of 380–385 Bcfe, a midpoint of ~4.5 Bcfe (or ~1%) up from its old production guidance of ~378 Bcfe.

CONSOL Energy expects Pennsylvania Operations’ 2016 coal sales to be in the range of 22.5 million–25.5 million tons.

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