VANCOUVER (miningweekly.com) – US fossil fuels producer Consol Energy is considering selling or spinning out its coal business as early as this year, the Pittsburgh-based energy company announced in its fourth-quarter earnings release on Tuesday.
The plan is another step in the company’s strategy to separate its coal business from its natural gas operations, which had seen Consol spin out some of its coal assets in 2015 to form CNX Coal Resources.
“We think there may be a market opportunity to achieve a sale of the coal business on favourable terms or, alternatively, to effect a spin-off as our leverage ratio comes down to a level that allows each business to stand on its own,” stated Consol CFO David Khani.
Consol expects to monetise between $400-million and $600-million of assets in 2017. The company states that 75% of the total 2017 gas output has been hedged.
Consol reported a fourth-quarter loss of $306-million, or $1.33 a share, down from a profit of $34.3-million, or $0.13 a share, during the year-earlier quarter.
For the full year, the company lost $848-million, or $3.70 a share, compared with a loss of $374.9-million in 2015.
During the fourth quarter, the average sales prices that Consol received for its natural gas improved to $2.22 per thousand cubic feet, up from $1.83 per thousand cubic feet a year ago.
Consol’s NYSE-listed stock closed down 7.43% on Tuesday at $16.94 apiece.