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Consol reports quarterly production records

World Coal,

Consol Energy has provided an operations update for Q4 2013, showing strong coal performance and record natural gas production.

CEO, J. Brett Harvey, commented: "Despite the potential for distractions during a quarter with a major asset transaction, CONSOL Energy's gas operations and mines performed with distinction. In natural gas, we again set quarterly and annual production records, while positioning ourselves to accelerate production growth in 2014. Our culture of continuous improvement yielded improved completion techniques in the Marcellus Shale, as well as substantial improvements for drilling costs per lateral foot, on an annual basis. Our coal mines ran well in the quarter as we also work to complete, in early 2014, three major projects, which are detailed below.”

Natural gas
The company’s gas division produced 48.5 billion ft3 for Q4 2013, 16% more than the 41.8 billion ft3 produced in Q4 2012. Annual 2013 gas production was 172.4 billion ft3.

Consol's coal division produced 7.1 million t in Q4 2013, including 1.2 million t of low-vol coking coal from the company's Buchanan Mine. This was greater than the 6.6 million t, including 0.7 million t from Buchanan, in Q4 2012. Annual 2013 coal production was 28.5 million t. Annual 2012 coal production was 27.2 million t.

During Q4 2013, Consol's total coal inventory remained unchanged at 0.6 million t as of 31st December 2013. Thermal coal inventory decreased by 0.1 million t to 0.4 million t during the quarter, as sales exceeded production. Low-vol Buchanan inventory increased by 0.1 million t to 0.2 million t during the quarter.

2014 forecasts

Natural gas
Consol Energy expects its 2014 gas production to range between 215 – 235 billion ft3. Q1 2014 gas production is expected to be approximately 47 – 49 billion ft3.

The company’s Marcellus Shale segment is expected to produce between 107 – 109 billion ft3 in 2014, 87% more than the 57.8 billion ft3 produced in 2013.

Consol expects Q1 2014 total coal production to be between 7.2 – 7.6 million t. Annual 2014 total coal production guidance is 30.1 – 32.1 million t. Buchanan Mine's Q1 production is expected to be between 1.1 – 1.2 million t, while annual production guidance is now estimated at 4.2 – 4.7 million t.

Coal Division Operations

In 2013, the company’s coal division saw safety exceptions increase by 21%, from 134 to 162. In the area of environmental compliance, Consol saw violations decrease by over 41%, from 79 to 46, compared to the previous year. During the same period, Consol reported a 14% reduction in total MSHA violations with all mines and a 17% reduction in total MSHA violations for the retained coal mines.

The coal division expects to complete three projects in Q1 2014: the BMX Mine and the Bailey Preparation Plant upgrades, the Enlow Fork Overland Conveyor Belt, and the Buchanan Mine Contrary Service Hoist.

The BMX Mine is on schedule to begin coal production in mid-March 2014. Also, the Bailey Preparation Plant upgrades, which will support these additional BMX Mine tons, are also on track to begin operations during the same period.

The Enlow Fork Overland Conveyor Belt is expected to begin operations by the end of January 2014. This will allow the mine to continue sealing the abandoned areas of the mine, which will improve unit costs, productivity, and reduce risk for employees associated with the maintenance of those areas of the mine.

Consol expects the Buchanan Mine Contrary Service Hoist project to begin operations by the end of January 2014. This project upgraded the former entrance to the mine to transport equipment and supplies closer to the face, which increases efficiency by cutting down approximately 15 miles, round-trip, of haulage track. The total cost of the projected is expected to be approximately US$ 24 million.

Adapted from press release by Katie Woodward

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