The Marcellus Shale once again drove natural gas production higher at Consol Energy Inc. last quarter, when companywide production increased by 23% from the year-ago period to reach 48.4 Bcfe and nearly matched a quarterly record the company set in the final three months of 2013.

Nearly half of 1Q2014 production came from Consol’s Marcellus acreage in southwestern Pennsylvania and northern West Virginia, which produced 20.7 Bcfe, or almost double the 10.7 Bcfe the company produced in the Marcellus during 1Q2013.

Although Consol holds a sizeable acreage position in Ohio’s Utica Shale, mostly in Noble County in that play’s core, it has focused more heavily in the Marcellus, where production is likely to continue increasing as its drilling program in West Virginia is only just beginning to ramp-up.

As company officials reminded financial analysts during a conference call to discuss year-end earnings in January (see Shale Daily, Jan. 31, 2013), Consol’s most recent quarterly results now serve as a better indication of how the company will perform in the coming years in an era that will be defined more by natural gas than coal, which had long been Consol’s emphasis.

Last October, Consol announced a transformative move to advance its natural gas production when it sold five West Virginia coal mines in a deal valued at $3.5 billion (see Shale Daily, Oct. 28, 2013). Although company officials have acknowledged that the transformation is not complete, the marketplace has started to look more favorably on the company as it continues to lock in a better position in the Appalachian Basin (see Shale Daily, April 2).

Consol said in an update on Tuesday that it has been hedging its production more aggressively as of late. Nearly three-quarters of its 1Q2014 production, or 34 Bcf, was hedged at an average price of $4.72-4.73/Mcfe. A joint venture with Noble Energy Inc., in which Consol’s liquidity also benefits from a drilling carry when gas prices stay above $4/MMBtu, gives it access to 690,000 combined net acres, mostly in the Marcellus fairway. The company is targeting a 30% growth rate in its production in both 2015 and 2016, while this year’s guidance of 215-235 Bcfe remains on track with the latest update.

Consol also said Tuesday that it would present its quarterly earnings statements in a new format that separates coal expenses from gas expenses beginning with its 1Q2014 release later this month. The new format is aimed at increasing transparency and better laying out the company’s energy businesses.

In a separate update on Tuesday, coming from a company that also has seen gradually improving results after struggling to get off the ground (see Shale Daily, March 28), Rex Energy Inc. said its three-well Ocel pad in its Warrior North prospect of Carroll County, OH, in the Utica Shale tested at an average five-day sales rate per well of 1,472 boe/d. The mix consisted of 48% natural gas liquids, 44% natural gas and 8% condensate. CEO Tom Stabley said the results further validate the company’s acreage potential in an area where it has five other wells flowing into sales and another 100 additional drilling locations identified.