VANCOUVER (miningweekly.com) – The board of US-based fossil energy producer Consol Energy has approved the company's split into two different, publicly traded companies, Consol announced on Tuesday.

The Cecil-based energy company will officially split on November 28, when Consol shareholders will receive one share of common stock for every eight shares of Consol they own as of November 15, according to a news release.

Consol advised that the coal company would keep the Consol Energy name but operate under a different ticker symbol 'CEIX'. The gas company will be called CNX Resources Corp and adopt Consol's current ticker symbol 'CNX'.

CNX Coal Resources, a master limited partnership with coal mines in Washington and Greene counties, will change its name to Consol Coal Resources LP and be 100% owned by Consol Energy. It will operate under a new ticker, 'CCR'.

Talks of spinning off Consol Energy's coal business began in January when company officials announced that they expected to sell or spin off what is left of the 153-year-old company's coal business before year-end.

Meanwhile, Consol Mining, a Delaware corporation formed in connection with Consol Energy's demerger, announced the pricing of $300-million of its 11% senior secured second lien notes due 2025 at a price of 100% of their face value in a private offering. The notes will pay interest semi-annually in arrears. The offering is expected to close on or about November 13, subject to the satisfaction of customary closing conditions.

The gross proceeds of the offering will initially be deposited into a segregated account held by the company, and be released upon closing of the separation transaction. The proceeds can only be released following the business separation, and should this not have occurred by March 15, 2018, the company will redeem the notes in a special mandatory redemption at a price equal to 100% of the initial issue price of the notes, plus accrued and unpaid interest to, but excluding, the payment date of the special mandatory redemption.

Q3 RESULTS
Consol Energy reported a net loss attributable to shareholders of $26-million, or a loss of $0.11 a diluted share, compared with a net income of $25-million, or earnings of $0.11 a share, in the third quarter of 2016.

Earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortisation from continuing operations were $190-million for the third quarter ended September, a 40% decline compared with $314-million in the year-earlier quarter. 

The headline loss came to $36-million, or $0.15 a share, well below average analyst forecasts calling for earnings of $0.02 a share.

Total revenues came to $671.28-million, 10% lower year-on-year when compared with the $745.58-million in revenues recorded for the same period a year earlier.

During the third quarter of 2017, Consol's exploration and production (E&P) division sold 101.0 Bcfe, or an increase of 5% from the 96.4 Bcfe sold in the year-earlier quarter, driven mainly from Marcellus Shale volumes. Total quarterly production costs decreased to $2.26/Mcfe, compared with the year-earlier quarter of $2.36/Mcfe, driven primarily by reductions in operating expense, non-income based taxes and depreciation, depletion and amortisation.

Consol Energy maintains its E&P division production guidance for 2017 of about 405 Bcfe to 415 Bcfe and total E&P capital expenditure (capex) in 2017 of about $620-million to $645-million. For full-year 2018, the company maintains production guidance of 520 Bcfe to 550 Bcfe.

Consol Energy's Pennsylvania (PA) coal mining operations sold 6.3-million tons in the third quarter, compared with 6-million tons during the year-earlier quarter. During the quarter, the average cost of coal sold increased slightly to $37.32/t, compared with $35.79/t in the year-earlier quarter. 

Consol Energy expects total consolidated PA mining operations total about 26-million to 27-million tons for 2017. The company also lowered total consolidated capex for PA mining operations to a range of between $92-million and $108-million for 2017.

The NYSE-listed stock fell as much as 9.25% on Tuesday mornings, to an intraday low of $15.01 a share, before clawing back ground to change hands at around $16.54 a share (still down 1.15%) in the afternoon session.