CONSOL Energy Inc. (CNX) came up with an operations update for the first quarter ended March 31, 2011. Encouraged by its performance in the just finished quarter, the company also raised its production forecast for the second quarter and the full-year 2011.
Coal miner, CONSOL Energy said production at its Coal Division has reached 17.2 million tons for the quarter, the highest in any quarter since the fourth quarter of 2008. The company said its coal mines performed exceptionally well in the said quarter. Coal production for the quarter included 1.5 million tons produced from the company’s Buchanan Mine.
This exceptional performance at CONSOL’s mines resulted in thermal coal inventories rising by 0.6 million tons to 2.5 million tons during the quarter. CONSOL said it has drilled 13 horizontal Marcellus Shale wells in the quarter comprising seven wells in Southwest Pennsylvania, four in Central Pennsylvania and two in Northern West Virginia. This has put the company slightly ahead of schedule in achieving its 70 wells target for 2011.
Production results at CONSOL Energy’s Gas Division were also promising with gas production reaching a record of 35.9 Bcf in the first quarter 2011.
Encouraging results in the quarter has led to CONSOL Energy raising its expectations for the future. The company now expects its 2011 coal production to be about 60-62 million tons, from the previous estimate of 59-61 million tons.
For the second quarter of 2011, which is seasonally lower than the first, the company expects to produce about 14.75-15.25 million tons of coal. However, the company re-affirmed its 2011 gas production guidance of 150-160 Bcf.
CONSOL Energy is expected to report its first quarter 2011 earnings results on April 28, 2011. For CONSOL Energy, the current Zacks Consensus EPS Estimates for first-quarter 2011, fiscal year 2011 and fiscal year 2012 are 73 cents per share, $2.79 per share and $4.41 per share, respectively.
Based in Canonsburg, Pennsylvania, CONSOL Energy is a multi-fuel energy producer and energy services provider, primarily catering to the U.S. energy producers.
CONSOL Energy at present retains a Zacks #3 Rank (short-term Hold rating). Among others, the company competes with Peabody Energy Corporation (BTU) and Massey Energy Co. (MEE). We maintain a long-term Neutral rating on the stock.
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