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Consol Energy reports 3Q15 results

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World Coal,

Consol Energy Inc. has reported its 3Q15 results. The company’s net income totalled US$119 million (US$0.52 per diluted share). EBITDA saw an increase from the same quarter in 2014 at US201 million and reached US$374 million for 3Q15. Adjusted EBITDA totalled US$136, whereas in the same quarter last year it was US$236 million million. Cash flow from operations in the quarter was US$110 million – a decline from US$293 million in 3Q14.

"Despite depressed commodity prices, Consol remains focused on achieving our free cash flow base plan over the next 15 months," commented Nicholas J. DeIuliis, President and CEO. "During the quarter, we beat production targets, locked in a significant percentage of our revenues for 2016 with additional gas hedges and multi-year coal contracts, significantly reduced operating costs, corporate overhead, and legacy liabilities, and accelerated our asset sale monetisation programme. These steps provide increased confidence in our ability to achieve our free cash flow base plan that we highlighted during our second quarter 2015 earnings call, and we are hard at work with multiple processes underway to monetise additional assets this year and into 2016. Expected proceeds will go towards reducing debt to help accelerate the separation of our coal and E&P Divisions."

The company's coal division produced 7.3 million short t in 3Q15, a decline from 7.8 million short t in 3Q14. In the Virginia operations, the company's Buchanan mine saw metallurgical coal prices continue to decline. Average sales price per short t for the Virginia operations decreased during the quarter to US$51.82/short t, whereas in 3Q14 it was US$70.57/short t.

The Pennsylvania operations average sales price per short t increased slightly from 2Q15 average sales prices to US$56.99/short t in 3Q15 as a result of lower exported spot sales. However, compared to 3Q14 this is a decline in average sale prices.

"A testament to our premium assets and our coal marketing team, Consol continues to see a tremendous amount of contracting success in, what continues to be, a brutal coal environment," DeIuliis stated. "The company now has a 2016 committed position of approximately 74% of total estimated Pennsylvania operations sales tons. As highlighted by CNXC, the company now has in place multi-year commitments that secure Consol as the anchor supplier to the largest, most efficient, and most environmentally compliant coal power plants in the PJM and SERC regions. These power plants are expected to operate at high-capacity factors for the coming years. In addition, Consol has secured multi-year commitments with key power plants in the upper Midwest and Southeast regions, which are markets that have historically been thought of as the domain of the Illinois, Central Appalachian, and Powder River Basins."

Edited from press release by Harleigh Hobbs

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