CONSOL Energy Announces Operational And Financial Update; Company Expects To Report A Third Quarter Loss Due To Combination Of Marketing And Operational Issues; Gas Division Reports Exploratory Success In Utica Shale
CONSOL's total coal inventory decreased during the quarter by 0.7 million tons to 1.7 million tons as of September 30, 2012. Thermal coal inventory decreased by 0.8 million tons during the quarter, as sales outpaced the scaled-back production. Low-vol and mid-vol coal inventory increased by 0.1 million tons during the quarter, to 0.4 million tons.
CONSOL Energy's core values are safety, compliance, and continuous improvement. During the first nine months of 2012, the company has experienced a 4% year-over year improvement in the incident rate among employees. On October 5, we held our second Core Value Summit with our key vendors to help them embrace our core values. As a result of our increased focus on outside vendor safety, we have experienced a 14% decline in our contractor incident rates over the same period. During the third quarter, the company's Enlow Fork Mine logged one million hours without incurring a recordable injury. Against this backdrop of improving overall safety, though, CONSOL Energy's coal division did suffer a fatality in the third quarter. While we continue to invest significantly to reach our ultimate goal of Absolute Zero, our challenge is to continue to identify and eliminate risks.
CONSOL's Gas Division produced 39.5 Bcf for the 2012 third quarter, down slightly from the 40.4 Bcf produced in the 2011 third quarter. The just-ended quarter, however, was impaired by approximately 0.2 Bcf due to the September idling of the Buchanan Mine, which produces associated gas. A second complication in making a comparison was that last year's third quarter production contained 100% of the Marcellus Shale production, half of which was tendered to the Noble Energy joint venture on September 30, 2011. The year-earlier quarter's production also contained some production from Antero's overriding royalty interest, before it was sold back to Antero. On an adjusted basis, therefore, last year's 40.4 Bcf would have been approximately 35.9 Bcf, net to CONSOL. On an apples-to-apples basis, CONSOL's gas production would have increased by 13%, if not for these items.
During the third quarter of 2012, CONSOL Energy drilled 12 Marcellus Shale wells, completed 12 Marcellus Shale wells, and placed 22 online. Additionally, Noble Energy drilled four Marcellus Shale wells in the liquids-rich area of the play. Also during the quarter, CONSOL Energy drilled four Utica Shale wells in Ohio, completed two Utica Shale wells, and placed one Utica Shale well on line. Hess Corporation drilled one well in the Utica Shale.Fourth Quarter 2012 Forecasts
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts