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How Did CONSOL’s E&P Division Perform in 3Q16?

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Nov. 7 2016, Updated 1:06 p.m. ET

CONSOL Energy E&P division’s 3Q16 operational performance

For 3Q16, CONSOL Energy’s (CNX) E&P (exploration and production) division reported total production of ~96.4 Bcfe (billion cubic feet equivalent), which is higher by ~12% when compared with its 3Q15 production of ~86.1 Bcfe.

Sequentially, CONSOL Energy’s 3Q16 production is lower by ~3% when compared with 2Q16. CONSOL Energy’s 3Q16 production growth came from the Marcellus Shale and Utica Shale.

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CONSOL Energy separates from Marcellus Shale joint venture

On October 31, 2016, CONSOL Energy and Noble Energy (NBL) announced the separation of their Marcellus Shale 50-50 joint venture. This joint venture was formed in 2011 for the exploration, development, and operation of primarily Marcellus Shale properties in Pennsylvania and West Virginia. Under the separation agreement, each company will own and operate a 100% interest in its properties and wells in two separate operating areas. Each company will have independent control and flexibility with respect to the scope and timing of future development over its operating area.

CONSOL Energy will operate a 100% working interest in ~306,000 Marcellus acres with associated production of ~620 million cubic feet per day of natural gas equivalents. The majority of the acreage operated by CONSOL Energy resides in Pennsylvania.

CONSOL Energy’s 2016 E&P production guidance

CONSOL Energy increased its E&P division’s 2016 production guidance to a range of 390–395 Bcfe, a mid-point increase of ten Bcfe (or ~3%) from its old production guidance of ~383 Bcfe.

Peers

Range Resources (RRC) and Southwestern Energy (SWN) also operate in the Marcellus Shale. Range Resources (RRC) has reported a ~6% sequential increase, whereas Southwestern Energy (SWN) has reported a ~6% sequential decrease in 3Q16 production. Exco Resources (XCO) and Chesapeake Energy (CHK) also operate in the Marcellus Shale. The ETF ISE-Revere Nat Gas Index Fund (FCG) invests in natural gas producers, whereas the Vanguard Energy ETF (VDE) invests in the broader energy market.

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