Consol Energy’s 4Q16 Production Guidance, Management Strategies



Production guidance

Consol Energy (CNX) didn’t give any specific production guidance for 4Q16. But in November 2016, it increased its E&P (exploration and production) division’s 2016 production guidance to 390–395 Bcfe (billion cubic feet equivalent). That’s a midpoint increase of 10 Bcfe (or ~3.0%) from its previous production guidance of 382.5 Bcfe.

In the first nine months of 2016, Consol Energy’s production was 293.2 Bcfe. Based on its 2016 production guidance range, its 4Q16 production will be 96.8–101.8 Bcfe.

On a year-over-year basis, the midpoint of Consol Energy’s 4Q16 estimated production is ~4.0% higher than 4Q15. Sequentially, its 4Q16 estimated production is ~3.0% higher than 3Q16.

The company expects its 4Q16 production growth to come from the Marcellus Shale and the Utica Shale. CNX’s peers Range Resources (RRC), Southwestern Energy (SWN), Exco Resources (XCO), and Chesapeake Energy (CHK) also operate in the Marcellus Shale.

The First Trust ISE-Revere Natural Gas ETF (FCG) invests in natural gas producers.

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Production mix guidance

For 2016, CNX expects natural gas production of 346–349 Bcf (billion cubic feet), NGL (natural gas liquids) production of 6,500–6,750 MBbls (thousand barrels), crude oil production of 62–68 MBbls, and condensate production of 800–850 MBbls.

Capital budget

Despite increasing its E&P division’s 2016 production guidance, Consol Energy’s capital budget for the division remains unchanged at $190.0 million–$205.0 million.

For 2016, Consol Energy plans to spend $160.0 million–$655.0 million on drilling and completion activities. In August 2016, it added two rigs to begin drilling. Those rigs will result in drilling nine dry Utica wells in the second half of 2016.


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