Consol Energy’s 2Q16 Production Guidance and Management Strategies



Consol Energy’s production guidance

Consol Energy (CNX) did not give any specific production guidance for 2Q16. For 2016, Consol Energy expects its E&P[1. Exploration and Production] division’s total production to grow by ~15% year-over-year.

In 2015, Consol Energy’s E&P division’s total production was ~329 Bcfe (billion cubic feet equivalent). In 2016, Consol Energy’s E&P division’s total production should be ~378 Bcfe.

In 1Q16, Consol Energy’s E&P division reported total production of ~97.5 Bcfe, which is higher by ~36% when compared with its 1Q15 production of ~71.6 Bcfe. So it looks like Consol Energy is on track to meet or beat its 2016 E&P total production guidance.

For 2016, CNX expects natural gas production of ~335 Bcf (billion cubic feet), natural gas liquids production of ~6.0 MMBbls (million barrels), crude oil production of ~65 MBbls (thousand barrels), and condensate production of ~1.0 MMBbls.

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Other upstream players

Among the other upstream companies from the S&P 500 (SPY), Marathon Oil (MRO) and ConocoPhillips (COP) have reported respective ~15% and ~2% year-over-year decreases in their 1Q16 production volumes.

Among the non–S&P 500 companies, Encana Corp (ECA) reported an ~20% year-over-year decrease in its 1Q16 production, and Diamondback Energy (FANG) reported an ~25% year-over-year increase in its 1Q16 production.

The Direxion Daily S&P Oil & Gas Exploration & Production Bull 3x Shares ETF (GUSH) is a leveraged fund that invests in oil and gas exploration & production companies.

Consol Energy’s E&P capex

For 2016, Consol Energy expects its E&P division’s capital budget to range from $205 million–$325 million. This is ~$185 million lower than the previous guidance of $400 million–$500 million, based on the midpoints. For 2016, Consol Energy plans to spend $110 million–$210 million on drilling and completion activities.

In 1Q16, Consol Energy’s E&P Division spent $62.9 million in capital expenditures.


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