Consol Sees $835 - $865 Million in 2013 Capital Spending

Consol Energy Inc. expects to invest between $835 million and $865 million in its coal, gas, and water businesses in 2013, less than the $1.5 billion the coal and gas producer in October estimated it invested in coal and gas projects in 2012.

The latest amount adjusts for between $455 million and $640 million in proceeds from asset sales.

Chief Executive J. Brett Harvey noted that once Consol has completed its BMX mine, it doesn't expect to invest in new, major coal-growth projects. In 2014 and beyond, it expects annual coal investments to approach maintenance-of-production levels of $5 to $6 a ton.

Consol said it will fund the net investment for this year through its cash flow from operations.

Within its coal-operations category for 2013, Consol expects to invest $318 million for maintenance-of-production projects. Meanwhile, within its gas-operations category, the company expects to invest about $835 million to $935 million.

Consol also noted it will spend $600 million on continuing to develop its Marcellus Shale assets, which includes drilling capital of $415 million.

The company projects its 2013 gas production to be between 170 billion of cubic feet equivalent to 180 bcfe, of which 95% is expected to be dry gas. It said the total production, if achieved, will be an increase of between 8% and 15%, compared with actual 2012 production of 156.3 bcfe.

U.S. coal producers have battled major challenges as lower natural-gas prices sap demand for coal, leading coal miners to slash production and lay off workers.

As the energy market shifts, Consol has been developing its natural-gas operations. In a partnership with Hess Corp., it is jointly developing its Utica Shale holdings in Ohio.

In October, the company said it swung to a third-quarter loss as the energy company's revenue suffered from softer-than-expected coal production. And it agreed to sell nonproducing coal assets in western Canada for $127 million in two separate deals at the end of 2012, continuing to sell assets to focus on its core business.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Senior Financial Analyst Job
Expertise: Accounting|Financial Analyst
Location: Denver, CO
Manager - Financial Reporting
Expertise: Accounting|Financial Analyst
Location: Houston, TX
JIB Supervisor
Expertise: Accounting
Location: Houston, TX
search for more jobs

Brent Crude Oil : $50.47/BBL 0.98%
Light Crude Oil : $49.72/BBL 1.09%
Natural Gas : $2.76/MMBtu 1.09%
Updated in last 24 hours