CONSOL Energy

CNX Resources | CONSOL Energy | Energy Companies | Utica Shale

CONSOL 4Q15: All About that Utica, ‘Bout that Utica, No Marcellus
February 1, 2016February 1, 2016

Last Friday CONSOL Energy released their fourth quarter 2015 update and we couldn’t stop the Meghan Trainor song “All About That Bass” from going through our heads, changing the word “bass” to Utica and “treble” to Marcellus. CONSOL was positively effusive about their Utica program and what it means for the future of the company. And well they should be (pun intended). In 4Q15 CONSOL drilled and brought online it’s most initially productive-ever Utica well, the GH 9 in Greene County, PA. The well’s initial flow was 61.9 million cubic feet per day per day (MMcf/d). That’s not as high as EQT’s record-breaker of 72.9 MMcf/d, also in Greene County (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!), but still, it’s amazing output for the CONSOL well. That amazing second well comes on the heels of CONSOL’s first PA Utica well, drilled in Westmoreland County in 3Q15, with an initial flow rate of 61.4 MMcf/d (see CONSOL 3Q15: Natgas Production Up 33%, Natgas Revenue Down $56M). Here’s what really caught our eye about Friday’s update and accompanying analyst conference call: In the Ohio Utica, the first well CONSOL drilled took 84 days and the drilling phase cost them $9 million. By the fifth well, the cost had gone down to $5 million. And they now believe they can get the cost of drilling a Utica well down to $4 million and do it in 23 days. Astonishing! (Note: that number is not the “all in” cost, which still is still more than $15 million per well.) So what about CONSOL’s Marcellus program?…
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Allegheny County | CNX Resources | CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale

CONSOL Pursues Drilling Test Utica Well at Pittsburgh Airport
January 7, 2016January 7, 2016

Sometimes when we’re wrong, we’re still right! Last June MDN reported that CONSOL Energy, currently in the process of drilling a series of Marcellus and Upper Devonian shale wells at the Pittsburgh International Airport, was mulling over the possibility of drilling a single test Utica well at the airport (see CONSOL Energy May Add More Utica Wells to Pitt. Airport Project). Our error was in reporting CONSOL had already received a permit to drill a Utica well–they had not. However, CONSOL has just received permission from local town officials to swap out one of the planned Marcellus wells with a Utica well…
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CNX Resources | CONSOL Energy | Energy Companies

CONSOL Energy Slashes 2016 Drilling Budget 50% from Previous Plan
January 7, 2016January 7, 2016

There’s just no ignoring the fact that most (many? all?) Marcellus/Utica drillers are pulling in their horns for 2016 and, as things stand right now, will drill far less this year than they did last. Take CONSOL Energy as an example. Yesterday CONSOL issued a revised 2016 capital budget and operational forecast (full copy below). CONSOL has decided to spend even less on drilling in 2016 than previously announced. CONSOL spent $1.3 billion on drilling in 2014, $1 billion last year, and was planning “$400-$500 million” this year. Now? That number has crumbled to $205-$325 million. You don’t drill many wells with $200 million. CONSOL’s update says the company plans to spend $110-$210 million on drilling and completing wells, with an emphasis on completing already-drilled wells. Of note and interest is the increasing number of Utica wells that are in the CONSOL portfolio. Even though CONSOL will drill and complete far fewer wells than previous years, they still expect production to increase by 15%…
Read More “CONSOL Energy Slashes 2016 Drilling Budget 50% from Previous Plan”
CNX Resources | CONSOL Energy | Energy Companies

Corporate Raider Mason Hawkins Now Owns 23.1% of CONSOL Energy
January 7, 2016January 7, 2016

There’s little doubt about who now is, or soon will be, calling the shots at CONSOL Energy: corporate raider Mason Hawkins. Hawkins, along with corporate raider buddy Carl Icahn, is responsible for firing Aubrey McClendon from the company he co-founded (Chesapeake Energy) and further firing some 2,000 or more Chesapeake employees–all in a bid to put more money in his pocket. Hawkins and Icahn control Chesapeake by owning a combined 20% or so of the company’s outstanding shares of stock. In February 2015, MDN shared the disturbing news that Hawkins and his Southeastern Asset Management had amassed 14% of CONSOL’s outstanding shares of stock (see Corporate Raider Mason Hawkins Holds 14% of CONSOL Energy Stock). By July that number ballooned to 21% and Hawkins was throwing his weight (and money) around (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Now? We spotted a notice that Southeastern Asset Management’s stake in CONSOL has grown to 23.1% of the company’s outstanding shares. Which means Hawkins can have his way with the company…
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CNX Resources | CONSOL Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Washington County

PA DEP Fines CNX Gas $450K for Drawing Too Much Water Too Often
December 18, 2015December 18, 2015

Turns out drawing “free” water from a reservoir in Pennsylvania can cost you quite a bit. CNX Gas, the drilling division/subsidiary of CONSOL Energy, didn’t follow an agreed-upon plan for how much, and how often they withdrew water from a reservoir in North Franklin Township (Washington County), PA. The water withdrawal violations went on between 2011 and 2014 and because of it, CNX will now pay a whopping $450,750 fine. Three-fourths of the fine goes to the Dept. of Environmental Protection (DEP), and the other one-fourth goes to the PA Fish and Boat Commission (PFBC). Here’s the details from the DEP…
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CONSOL Energy | Energy Companies | Southwestern Energy

Short Selling for CONSOL, Southwestern Energy Spikes Up
December 15, 2015December 15, 2015

Once again we return to a recurring theme of reporting on “short selling” in Marcellus/Utica stocks. For a primer/explanation of what short selling is, read our previous story: “Short Selling” – An Important Signal for Marcellus-Related Companies. The boiled down version is this: Traders who sell stocks “short” are betting that the price of that company’s stock is heading lower. A lower stock price means the value of the company goes down, making it harder to borrow money, raising the rates on money borrowed, etc. Low stock prices mean it’s harder to do business in general. The average short selling of stocks for all companies in all industries is typically 5-6% of trading volume. Recently, oil and gas stocks, as an industry, have seen an average of 12% short selling of their stocks. When short selling picks up for Marcellus/Utica companies, we take note because it’s a signal about the potential value and future prospects for that company. If more than 12% of a company’s stock is being sold short, well, that’s just not a good “sitch” (as my Millennial kids say). We spotted notices that two important Marcellus drillers’ stocks are quite a bit above the 12% range–CONSOL Energy and Southwestern Energy…
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CNX Resources | Commodity Price | CONSOL Energy | Energy Companies | Industrywide Issues

Where Do Drillers Like CONSOL Think Gas Prices are Heading?
December 14, 2015December 14, 2015

Where do Marcellus/Utica drillers believe the price of natural gas in the northeast is heading over the next few years? Wouldn’t you love to be a fly on the wall in boardroom meetings where gas price is discussed? We have the next best thing. It’s called hedging. Drillers (and others who buy and sell natural gas) often engage in a practice called hedging, which is, in a simplified explanation, a contract to sell (or buy) a commodity like natural gas at an agreed-on price at a future date. There is an element of risk in hedging. What if the price goes a lot higher? You have to sell at the lower price you agreed to. What if the price goes a lot lower? You’ve covered your derriere by locking in a higher price for the gas your produce. If you look at the hedging contracts gas companies strike, you get a sense for where they believe the price will go. We have an example from CONSOL Energy which has just released details of their hedging for the next few years. Where does CONSOL believe the price of natural gas is going from now until 2018? In a word, down…
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CONSOL Energy | Energy Companies

Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others
December 3, 2015December 3, 2015

We’re not above admitting when we’ve been wrong. Last July MDN shared a rumor–and stressed it was a rumor–that CONSOL Energy was in talks to sell it’s CNX Gas division to Noble Energy (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A few days later we modified that rumor to say that Noble Energy would take over the joint venture acreage the two have together (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Neither of those things ended up happening–at least not yet. However, CONSOL’s largest single investor, corporate raider Mason Hawkins (who in league with corporate raider Carl Ichan have been screwing with Chesapeake Energy) told CONSOL to separate their coal business from the natural gas business, which they’ve begun to do (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Parent company CONSOL’s stock is traded as CNX. A new coal division (for investors) was created, CNX Coal (CNXC), although some (much?) of the coal assets are still part of the CNX entity. CONSOL’s midstream/pipeline business, called CONE Midstream (a jv with Noble Energy) is traded as CNNX. Yes, it’s all a mish mash. We mention all of this as background to an article by a trader commenting on CONSOL’s CNX stock which has literally crashed over the past year–down more than 80% in value. The trader calls the CNX stock a “widow maker”–meaning if you have the chops and can stick it out, there may be money to be had by investing in CNX stock. But, it’s a huge gamble, and not for the feint of heart, according to this trader…
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CNX Resources | CONSOL Energy | Energy Companies

CONSOL’s Bankers Say Company has $2B Worth of Gas in the Ground
November 24, 2015November 24, 2015

CONSOL Energy, one of the larger drillers in the Marcellus/Utica (based in Pittsburgh, a coal company transitioning to a gas company) issued an announcement yesterday that they’ve passed their twice-per-year test by their bankers and that once again their “borrowing base” is reaffirmed as being worth $2 billion. So what’s a borrowing base and why is it important?…
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CONSOL Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Westmoreland County

Western PA Municipal Authority Overpaid $785K in Gas Royalties
November 20, 2015November 20, 2015

Oh oh. The Municipal Authority of Westmoreland County has been collecting royalties for gas drilling on property it doesn’t own the mineral rights for. How much? The Authority was paid $785,000 in royalties that actually belong to the heirs of the former property owner. The Authority will have to pay the royalties back–but not in a one-lump sum. They’ll stretch out payments from now until September 2017…
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CONSOL Energy | Energy Companies | Industrywide Issues | Noble Energy | Pennsylvania | Pipelines | Regulation | Statewide PA | Wastewater

PA Allows Wastewater Pipelines to be Buried – With No Regulations
November 4, 2015November 4, 2015

A last minute change made to proposed new drilling regulations in Pennsylvania will mean (if adopted) that drillers can bury wastewater pipelines instead of being required to run them on top of the ground. Companies typically use pipelines in areas where it would be disruptive to have multiple truck trips in and out of an area. They’re also used to lower the cost of transporting wastewater (cheaper through a pipeline than by tanker truck). The change came after a letter-writing campaign launched by CONSOL Energy and their joint venture partner Noble Energy. But there’s a bit of controversy over the new standard that permits lines to be buried: the buried wastewater lines aren’t regulated. Not yet anyway…
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CONSOL Energy | Energy Companies

CONSOL Board Member Snaps Up $70K of Company Stock
November 4, 2015November 4, 2015

From time to time we highlight “insider buying” and “insider selling”–when top management either buys or sells their own company’s stock. Here’s one we’ve not seen before: A member of the board of directors for CONSOL Energy, Alvin R. Carpenter, has just bought himself 10,000 shares of CONSOL stock for $70,400. What does Carpenter know about CONSOL that we don’t? That’s the question that always runs through our heads when we read about these transactions. Here’s the low-down on Mr. Carpenter…
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CONSOL Energy | Energy Companies

CONSOL 3Q15: Natgas Production Up 33%, Natgas Revenue Down $56M
October 27, 2015October 27, 2015

CONSOL Energy released their third quarter 2015 financial and operating results today. Among the highlights: After adjusting for “certain unusual items,” CONSOL “only” lost $64 million in 3Q15. Natural gas production was up 33% over the same period last year. But because the price of natural gas has been hammered so hard, CONSOL’s natgas revenue for the quarter was down $56 million over the same period last year. Below are select sections of update, including information about CONSOL’s first dry Utica well in Westmoreland County, PA…
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CONSOL Energy | Energy Companies

CONSOL Continues Transition, Sells Another $101M in Coal Assets
October 7, 2015October 7, 2015

For those of us who concentrate on the natural gas (and oil) industry, it’s sometimes easy to forget that CONSOL Energy, with major drilling operations in the Marcellus and Utica Shale, began life and is still one of the country’s largest coal companies. We’ve been telling you for years that the company is transitioning from being a coal company to being a natgas company (see CONSOL CEO: Company Transitioning to “More of a Gas Company”). The transition continues. Yesterday CONSOL announced it has sold off more of its coal mining assets for a tidy $101 million…
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CONSOL Energy | Energy Companies | EQT Corp | Pennsylvania | Range Resources Corp | Rice Energy | Washington County

New Washington Co PA Training Facility for Well Pad Fires
September 29, 2015September 29, 2015

The Washington County (PA) Firemen’s Association recently opened a new $500,000 gas well training center at the fire academy located at 895 Western Ave in Houston, PA. The project, which took more than a year to plan and complete, was completely funded by some of the biggest and best drillers in the Marcellus/Utica, including Range Resources, Rice Energy, CONSOL Energy, EQT, American Well Service and others. It will be used to train first responders not only in Washington County, but also from other parts of Pennsylvania along with West Virginia and Ohio. According to Pennsylvania Fire Commissioner Tim Solobay, “There’s nothing like it outside of Texas”…
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CONSOL Energy | Energy Companies

Negative WSJ Article Causes CONSOL’s Stock to Slide, CEO Responds
September 24, 2015September 24, 2015

It’s strange, but true. Sometimes a single article that quotes a single financial expert/leader can dramatically affect a company’s stock price. Such is the case with CONSOL Energy. Last week an article in the Wall Street Journal quoted a hedge fund manager (investor playing with big piles of money) who said, in essence, he continues to bet that CONSOL’s stock will continue to drop in value, called a “short position” (for background on understanding short selling, see our article “Short Selling” – An Important Signal for Marcellus-Related Companies). The hedge fund manager accuses CONSOL of being driven by “financial engineering.” Since that news broke last week, CONSOL’s stock has gone down 16%. CONSOL CEO Nick DeIuliis, in an interview with the Pittsburgh Business Times, explains why the hedge fund manager is wrong about his company and its future prospects…
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