Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others
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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Is the long, sordid affair over Chesapeake Energy screwing Pennsylvania landowners out of royalties finally near an end? Chesapeake and some landowners, part of the “Demchak” class action lawsuit–certainly want you to think so. A year ago MDN told you about a settlement between “several thousand” Pennsylvania landowners and Chesapeake over the royalty issue–Chessy deducting post-production payments by pipeline companies in what some call a scam that leaves landowners signed with Chesapeake receiving royalty checks that are pennies on the dollar compared to what they should receive. The new settlement for those “several thousand” would be 2/3 of $11 million, after the lawyers get their 1/3 cut (see 
We’ll let you decide whether the recent action by the Pennsylvania Dept. of Environmental Protection (DEP) is in line with being a good regulatory watchdog, or with being a mafia Don, using the power of the government to shake down a drilling company. On Sept. 15, 2011 as Chesapeake Energy was drilling the Stinger 8H well in Aleppo Township (Greene County), PA, in an area known for its landslides–they experienced (yes) a landslide. The landslide created sediment that plugged about one-fourth of a mile of seven “streams” so tiny they don’t have names–essentially drainage ditches. The seven drainage ditches, when they have water in them, flow into a very small creek called Harts Run. In return Harts Run, which crosses the border into West Virginia, eventually empties into a slightly bigger creek called Pennsylvania Fork Fish Creek, which eventually empties into Fish Creek (slightly bigger again), which eventually empties into the Ohio River–on the other side of WV where it borders with Ohio. There is zero chance any of the sediment made it beyond Harts Run, let alone all the way to the Ohio. But still, it’s not a good thing if you’re not “careful” to prevent what the Guvment believes you should be able to prevent. Chesapeake, since that time (over four years ago), has essentially fixed the problem–spending millions to do so. Apparently there’s a little bit of work left to do. The PA DEP comes along and yesterday announced that Chesapeake has agreed to pay the DEP a whopping $1.4 million fine for this four year-old accident, as well as do a bit of tidying up of the drainage ditches. Here’s the kicker–Chessy doesn’t even own that well any more…
As we have long chronicled, a few anti-drilling parents from the Mars School District (Butler County, far western part of the state), backed by a couple of Big Green groups from the other side of the state (in the Philadelphia area), sued Middlesex Township to stop shale drilling in rural portions of the county. Rex Energy had applied for, was legally permitted for, but still hasn’t been allowed to drill a series of wells some three-fourths of a mile from the Mars School (for background, 
Three weeks ago MDN told you that Range Resources had decided to sell 3,500 operated wells and approximately 460,000 net acres in the Nora/Haysi combined fields located in southwestern Virginia for $876 million to an unnamed buyer (see