With two new joint ventures in hand, Consol Energy Inc. is gearing up for a big year in Appalachian shale.

The Pittsburgh-based company plans to spend $755 million on natural gas development this year, up from $662 million in 2011, but that increase also involves a shift away from coalbed methane (CBM) and conventional gas.

Consol plans to spend $575 million in the Marcellus and $50 million in the Utica this year — up from $427 million and $3 million, respectively, in 2011 — but it will cut CBM spending in half to $65 million and reduce spending on conventional gas to $65 million from $102 million. Consol is increasing spending on coal activities.

“This budget reflects out desire to create shareholder value by investing in our highest rate of return projects: our organic opportunities in coal, gas and liquids,” CEO J. Brett Harvey said. “We are, however, entering a year with an unusual amount of uncertainty. We have the ability to adjust our investment should circumstances warrant.”

Through its joint venture with Noble Energy, Consol plans to spend $395 million drilling 122 gross horizontal wells in the Marcellus, including 39 in the liquids-rich areas of the play of southwestern Pennsylvania and northern West Virginia (see Shale Daily, Oct. 5, 2011; Aug. 19, 2011). Consol also plans to spend $90 million on related gathering and compression projects. Through a deal finalized last October, Noble agreed to pay Consol close to $1 billion for a one-half interest in 628,000 net undeveloped acres in three installments, and it acquired a 50% stake in Consol’s existing Marcellus assets for nearly $232 million. Noble also agreed to fund about $2.1 billion of Consol’s future drilling and completions costs, which are expected to extend over an eight-year period.

Through its joint venture with Hess Corp., Consol plans to spend $50 million drilling up to 22 gross wells into the liquids-rich and oil phases of the Utica shale (see Shale Daily, Sept. 8, 2011). Hess agreed to acquire a 50% interest in Consol’s nearly 200,000-acre leasehold in eastern Ohio for aggregate payments of $593 million.

Consol expects production to be 160 Bcfe this year, up nearly 12% after adjusting for its sales of producing assets to Nobel and Antero Resources (see Shale Daily, Sept. 27, 2011). Consol expects production to grow to 200-220 Bcfe in 2013, once the drilling planned for this year yields sustained production. Consol is targeting production of 350 Bcfe by 2015 through increased drilling — from 213 net wells this year to 531 in 2015. That increase would come not only from shale activities, but also from CBM and conventional drilling activities.