Coal production guidance
For 2016, Consol Energy’s (CNX) Pennsylvania mining operations, which are part of its coal division, expects coal production of 23.6 million–24.4 million tons.
In the first half of 2016, Consol Energy divested its Buchanan Mine in southwestern Virginia and certain other metallurgical coal reserves. In 2016, coal sales associated with these discontinued operations were 2.1 million tons.
The midpoint of Consol Energy’s 2016 coal production guidance is ~11.0% lower than 2015. The lower production can be attributed to divestitures in 2016 and to the coal market weakness resulting from an unusually warm winter and low natural gas prices at the start of 2016.
For 2016, CNX expects its coal division’s capital budget to be $75.0 million–$100.0 million. That’s ~$28.0 million lower than the previous guidance of $105.0 million–$125.0 million, based on the midpoints.
In order to deal with lower energy prices and raise cash, many upstream players from the S&P 500 (SPY) and the S&P MidCap 400 (MDY), including Murphy Oil (MUR), QEP Resources (QEP), and Gulfport Energy (GPOR), have reduced their 2016 capex (capital expenditure).