Consol Energy lowers 2013 capex, shifts focus to gas
TORONTO (miningweekly.com) – Eastern US-focused diversified fuel producer Consol Energy on Monday said it planned to reduce its 2013 capital expenditure (capex) budget by about 11.5% to between $1.29-billion and $1.5-billion, the bulk of which would be spent on its natural gas division.
Following the sale of assets worth a total of between $455-million to $640-million during 2012, the company expected to invest between $835-million to $865-million this year. The company's capex budget for 2012 was about $1.7-billion.
Consol said it expected to invest between $410-million and $520-million in its coal operations, but would not invest in any other significant coal projects other than completing its BMX longwall mine, in western Pennsylvania, scheduled to be complete in the first quarter 2014.
CEO Brett Harvey said he expected the company to approach maintenance-of-production levels of $5/t to $6/t from 2014 onwards.
The company said it expected to invest between $835-million and $935-million in expanding its gas operations this year.
Consol operates a number of natural gas wells in the Marcellus Shale region of north-western US and expects the increased investment to boost total production by between 8% and 15% when compared with 2012 production of 156.3 billion cubic feet equivalent.
Consol Energy expects to fund its 2013 net investments through cash flow from operations.
The company expected to sell additional noncore assets this year.
The Pittsburgh-based coal miner reported a 106.5% drop in income during the third quarter as a number of planned and unplanned mine idlings impacted on the company’s financial performance, which was expected to have a residual impact during the fourth quarter.
Consol’s NYSE-listed shares traded almost a per cent lower at $29.89 apiece on Monday afternoon.
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