Consol Energy Inc. said Monday it produced between 99 and 103 Bcfe during the third quarter, according to preliminary estimates filed with the U.S. Securities and Exchange Commission (SEC) as part of its plans to spin off its remaining coal assets into a separate publicly traded company by year’s end.
The company doesn’t report its official third quarter results until Oct. 31, but if the estimates hold up, the period’s production would be above the 96.4 Bcfe produced in 3Q2016 and 92.2 Bcfe in 2Q2017. The company had problems at two Utica Shale pads in southeast Ohio during the second quarter that led to significant turn-in-line delays and only six wells coming online.
Management said at the time that despite those problems, the company was on track to meet its full-year production guidance of 420-440 Bcfe.
The company filed preliminary results with the SEC as a subsidiary plans to enter into various financing arrangements in connection with the coal spin-off. A registration statement filed earlier this year has not been declared effective by the SEC, and the coal and gas split is also subject to various conditions, including approval by the company’s board of directors.
Consol has worked for years to rebuild the core of its business around natural gas production. The company hopes to complete the separation by year’s end. When that happens, the independent publicly traded exploration and production (E&P) business would drop the Consol name altogether and rebrand.
Preliminary E&P capital expenditures for the third quarter are $140-160 million, which would be up from the year-ago spending of $49 million. Consol has budgeted $620-645 million for E&P and midstream expenses this year.
The company also appears to have remained on track with its plans to divest $400-600 million of noncore assets this year. The company estimates that it sold $75-92 million during the third quarter and received $326 million in the second quarter from sales.
“The company continues to pursue the sale of various noncore assets, including its Virginia coalbed methane project area and scattered Marcellus and Utica acres,” Consol said. “The company believes that it could enter into agreements for some of these additional asset sale transactions in the fourth quarter.”
Consol also estimates that it lost $14-36 million during the quarter, which would be down from net income of $25 million in the year-ago period.