Consol Energy’s Coal Production Guidance for 2Q16



Consol Energy’s coal production guidance

In response to the ongoing coal market uncertainty in early 2016, Consol Energy’s (CNX) coal division has reduced its 2016 expected sales forecast to 27 million–32 million tons. This is compared to its previous guidance of 30.6 million–33.4 million tons.

The reduction was due to the coal market weakness resulting from unusually warm winter weather and low natural gas prices. These factors impacted the customers’ coal burn.

Consol Energy’s 2016 coal guidance is almost flat when compared with its 2015 sales of ~29.2 million tons. Consol Energy did not give any specific guidance for its 2Q16 coal production.

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Consol Energy’s coal capex

For 2016, Consol Energy’s (CNX) expects its coal division’s capital budget to range from $105 million–$125 million. Based on the midpoints, this is ~$65 million lower than the previous guidance of $170 million–$180 million.

In order to deal with lower energy prices and raise cash, many upstream players from the S&P 500 (SPY) and S&P Midcap 400 (MDY)—including Murphy Oil (MUR), QEP Resources (QEP), and Gulfport Energy (GPOR)—have also reduced their 2016 capex.


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