PITTSBURGH, May 2, 2017 /PRNewswire/ -- CONSOL Energy
Inc. (NYSE: CNX) reported net cash provided by operating activities
in the just-ended quarter of $205
million, compared to $130
million in the year-earlier quarter, which included
$6 million of net cash provided by
discontinued operating activities. The company reported a net loss
of $34 million for the quarter, less
$5 million of net income attributable
to noncontrolling interest, for a net loss attributable to CONSOL
Energy shareholders of $39 million or
a loss of $0.17 per diluted
share.
Earnings before deducting net interest expense (interest expense
less interest income), income taxes and depreciation, depletion and
amortization (EBITDA) from continuing operations1 were
$104 million for the 2017 first
quarter, compared to $138 million in
the year-earlier quarter.
On a GAAP basis, the first quarter earnings included the
following pre-tax items attributable to continuing operations:
- Recorded a $138 million
impairment on Knox Energy LLC and Coalfield Pipeline Company, which
was recorded as Held for Sale at March 31,
2017 due to the fair value less costs to sell being less
than the carrying value;
- Recorded a $25 million unrealized
gain on commodity derivative instruments, related to changes in the
fair market value of existing hedges on a mark-to-market basis;
and
- Recorded $5 million in various
other nonrecurring items.
After adjusting for certain items, which are described in the
footnote to the EBITDA reconciliation table, the company had
adjusted net income attributable to CONSOL Energy
Shareholders1 in the 2017 first quarter of $38 million, or $0.17 per diluted share. Adjusted EBITDA
attributable to continuing operations1 was $217 million for the 2017 first quarter, compared
to $181 million in the year-earlier
quarter.
"During the quarter, substantial progress was achieved on three
important drivers of net asset value (NAV) per
share," commented Nicholas J.
DeIuliis, president and CEO. "First, for E&P, cycle
times are down, capital efficiencies are up, and well type curves
are further optimized, resulting in production guidance increases
in 2017 and 2018 without any increases to last quarter's previously
announced capital budgets. Second, our asset sales program is
in high gear, and we monetized over $100
million to date and expect to be over halfway to the high
end of our $400-$600 million asset
sales target by the end of the second quarter. Third, the
company generated approximately $100
million in organic free cash flow from continuing
operations1, which excludes asset sales, in the first
quarter and used that organic free cash flow to purchase our debt
at a discount and reduce interest expense."
During the quarter, CONSOL Energy operated two horizontal rigs
and drilled nine wells: seven dry Utica Shale wells in Monroe County, Ohio, and two Marcellus Shale
wells in Washington County,
Pennsylvania. The Ohio
wells averaged approximately 9,900 lateral feet, while averaging
21.5 drilling days per well, compared to 24.0 drilling days per
well during the fourth quarter of 2016. At the current pace, a
single rig could drill 16 dry Utica Shale wells averaging 10,000
foot laterals, per year, which is a 14% improvement compared to the
fourth quarter of 2016. Also during the quarter, CONSOL set a
Marcellus Shale record by drilling 7,380 feet of lateral in 24
hours on the MOR30B well, located in Washington County, Pennsylvania.
"Over the course of the quarter, the operational execution of
the team has been tremendous and, as a result, we have continued to
see further efficiency improvements in both drilling and completion
activities," commented Timothy C. Dugan, chief operating
officer. "These improvements have led to further reductions in
cycle times resulting in the acceleration of activity in 2017."
With the recent dissolution of the Marcellus Shale joint venture
(JV) now providing full operational and strategic control, along
with commodity price improvement, the company began monetizing
non-core E&P assets in the quarter. CONSOL Energy recently
closed on three asset sale transactions for total cash
consideration of $108 million, of
which the company has received aggregate proceeds of $16 million through March
31. One of the transactions was the sale of approximately
6,300 net undeveloped acres of the Utica-Point Pleasant Shale in
Jefferson, Belmont and Guernsey counties, Ohio, for total cash consideration of
approximately $77 million, or
approximately $12,200 per undeveloped
acre. Separately, the company divested non-core oil and gas assets,
pipelines, and surface properties in two separate transactions for
total cash consideration of $31
million. "These divestitures, along with additional packages
in process, give us the momentum and confidence to reach our
previously announced asset sales target of $400-$600 million, and we expect to be halfway to
the high end of the target by the end of the second quarter,"
commented David M. Khani, chief
financial officer.
During the quarter, CONSOL Energy generated approximately
$117 million in free cash
flow1, which included approximately $100 million of organic free cash flow from
continuing operations1. Utilizing free cash generated
during the quarter, the company repurchased approximately
$100 million of its 2022 bonds at an
average price of $98.54 in the open
market, while maintaining liquidity at year-end levels. The company
expects the 2017 leverage ratio to decline to approximately
2.0x by year-end.
1The terms "adjusted net income attributable to
CONSOL Energy Shareholders," "EBITDA from continuing operations,"
and "adjusted EBITDA from continuing operations" are non-GAAP
financial measures, which are defined and reconciled to the GAAP
net income below, under the caption "Non-GAAP Financial Measures."
The terms "free cash flow," and "organic free cash flow from
continuing operations" are non-GAAP financial measures, which are
defined and reconciled to the GAAP Net Cash Provided by Operating
Activities, also under the caption "Non-GAAP Financial
Measures."
E&P Division:
During the first quarter of 2017, CONSOL's E&P Division sold
95.0 Bcfe, or a decrease of 3% from the 97.5 Bcfe sold in the
year-earlier quarter, driven primarily from production declines in
the Utica Shale segment.
During the quarter, total production costs decreased to
$2.32 per Mcfe, compared to the
year-earlier quarter of $2.41 per
Mcfe, driven primarily by reductions to lease operating expense and
depreciation, depletion and amortization (DD&A). The reductions
to lease operating expense were partially offset by an increase in
gathering costs related to CONE Midstream fees due to the Marcellus
Shale production mix increasing resulting from the Marcellus Shale
JV dissolution in the fourth quarter of 2016, as well as additional
flowing production for CONSOL.
Due to increased drilling and completion activities, E&P
Division capital expenditures increased in the first quarter to
$100.8 million, compared to
$30.1 million spent in the fourth
quarter of 2016.
Marcellus Shale production volumes, including liquids, in the
2017 first quarter were 58.0 Bcfe, approximately 13% higher than
the 51.2 Bcfe produced in the 2016 first quarter. The increased
Marcellus production is due in part to CONSOL obtaining newer wells
and more flowing production as part of the Marcellus Shale JV
dissolution. Marcellus total production costs were $2.18 per Mcfe in the just-ended quarter, which
is a $0.27 per Mcfe improvement from
the first quarter of 2016 of $2.45
per Mcfe, driven by reductions to lease operating expense,
transportation, gathering and compression, and DD&A. DD&A
decreased on a per-unit basis primarily due to a reduction in
Marcellus DD&A rates resulting from an increase in the
company's Marcellus reserves following the Marcellus Shale JV
dissolution in the fourth quarter of 2016.
CONSOL Energy's Utica Shale production volumes, including
liquids, in the 2017 first quarter were 15.3 Bcfe, down
approximately 33% from 22.9 Bcfe in the year-earlier quarter. The
decline in Utica Shale volumes resulted primarily from three areas:
delayed timing associated with the development plan and turning
wells in-line; natural production declines in both the wet and dry
gas areas; and temporary shut-ins due to operational
considerations. CONSOL expects 2017 Utica Shale volume growth,
compared to 2016, driven by wells scheduled to get turned-in-line
(TIL) in the second half of the year. Utica Shale total production
costs were $2.16 per Mcfe in the
just-ended quarter, which is a $0.37
per Mcfe impairment from the first quarter of 2016 total production
costs of $1.79 per Mcfe. The cost
impairment was driven by an increase in firm transportation and
processing costs, an increase in property taxes associated with
Hess operated Utica production,
and an increase in Utica Shale DD&A rates due to higher capital
costs associated with the initial dry Utica Pennsylvania wells. These three
increases were partially offset with a reduction to lease operating
expense. CONSOL expects Utica Shale total production costs to
improve to approximately $1.80 per
Mcfe for full year 2017, driven primarily by the addition of lower
operating cost dry Utica Shale wells becoming a larger part of the
production mix.
E&P Division First Quarter Operations Summary:
In addition to drilling nine wells in the quarter with two
horizontal rigs, the company also utilized three frac crews. In
January 2017, the company finished
completion activity in Allegheny County,
Pennsylvania, on its ACAA1 pad, which contains six Marcellus
wells, as well as one Burkett and Rhinestreet well each. Three of
the Marcellus Shale wells were TIL in the quarter with the
remaining five wells carrying over into the second quarter. Frac
design optimization and improved logistics resulted in the company
frac'ing on average 1,245 feet per day, compared to 800 feet per
day in 2016. Operating at this pace, with pads drilled and ready to
frac, a crew can frac 46 Marcellus wells per year with an
average lateral length of 8,000 feet. Also during the quarter, the
company commenced completion activities in Monroe County, Ohio, on the SWITZ16 and SWITZ5
Utica pads, and in Ritchie County, West Virginia, on the PENS2
Marcellus Shale pad. The company expects these three pads to be TIL
in the second quarter of 2017.
E&P DIVISION RESULTS — Quarter-to-Quarter
Comparison
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
March 31,
2017
|
|
March 31,
2016
|
|
December 31,
2016
|
|
Sales -
Gas
|
|
$
|
273.6
|
|
|
$
|
157.4
|
|
|
$
|
202.4
|
|
|
Sales -
Oil
|
|
0.6
|
|
|
0.5
|
|
|
0.7
|
|
|
Sales -
NGLs
|
|
39.3
|
|
|
19.9
|
|
|
31.4
|
|
|
Sales -
Condensate
|
|
4.3
|
|
|
3.9
|
|
|
3.6
|
|
|
Total Sales Revenue
($ MM)
|
|
$
|
317.8
|
|
|
$
|
181.7
|
|
|
$
|
238.1
|
|
|
(Loss) Gain on
Commodity Derivative Instruments - Cash Settlement
|
|
(47.1)
|
|
|
84.3
|
|
|
42.0
|
|
|
Total
Revenue
|
|
$
|
270.7
|
|
|
$
|
266.0
|
|
|
$
|
280.1
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Tax ($ MM)
|
|
$
|
(93.5)
|
|
|
$
|
(22.9)
|
|
|
$
|
(222.5)
|
|
|
Adjusted Earnings
Before Income Tax ($MM)
|
|
$
|
19.9
|
|
1
|
$
|
19.0
|
|
2
|
$
|
14.3
|
|
3
|
Capital Expenditures
($ MM)
|
|
$
|
100.8
|
|
|
$
|
62.9
|
|
|
$
|
30.1
|
|
|
|
1Adjusted
earnings before income tax for the E&P Division of $19.9
million for the three months ended March 31, 2017 is calculated as
GAAP loss before income tax of $93.5 million plus total pre-tax
adjustments of $113.4 million. The $113.4 million adjustment
includes a $24.6 million pre-tax gain related to the unrealized
gain on commodity derivative instruments, a pre-tax loss of $137.9
million related to the impairment of exploration and production
assets and a pre-tax loss of $0.1 million related to severance
expense.
|
2Adjusted
earnings before income tax for the E&P Division of $19.0
million for the three months ended March 31, 2016 is calculated as
GAAP loss before income tax of $22.9 million plus total pre-tax
adjustments of $41.9 million. The $41.9 million adjustment includes
a $29.3 million pre-tax loss related to the unrealized loss on
commodity derivative instruments and a pre-tax loss of $12.6
million related to a gathering pipeline sale.
|
3Adjusted
earnings before income tax for the E&P Division of $14.3
million for the three months ended December 31, 2016 is calculated
as GAAP loss before income tax of $222.5 million plus total pre-tax
adjustments of $236.8 million. The $236.8 million adjustment is a
pre-tax loss related to the unrealized loss on commodity derivative
instruments.
|
CONSOL's E&P Division production in the quarter came from
the following categories:
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
March 31,
2017
|
|
March 31,
2016
|
|
% Increase/
(Decrease)
|
|
December 31,
2016
|
|
% Increase/
(Decrease)
|
GAS
|
|
|
|
|
|
|
|
|
|
|
Marcellus Sales
Volumes (Bcf)
|
|
52.9
|
|
|
45.1
|
|
|
17.3
|
%
|
|
51.5
|
|
|
2.7
|
%
|
Utica Sales Volumes
(Bcf)
|
|
11.6
|
|
|
17.7
|
|
|
(34.5)
|
%
|
|
17.2
|
|
|
(32.6)
|
%
|
CBM Sales Volumes
(Bcf)
|
|
16.7
|
|
|
17.6
|
|
|
(5.1)
|
%
|
|
17.4
|
|
|
(4.0)
|
%
|
Other Sales Volumes
(Bcf)1
|
|
4.9
|
|
|
5.7
|
|
|
(14.0)
|
%
|
|
5.2
|
|
|
(5.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS2
|
|
|
|
|
|
|
|
|
|
|
NGLs Sales Volumes
(Bcfe)
|
|
8.1
|
|
|
9.7
|
|
|
(16.5)
|
%
|
|
9.2
|
|
|
(12.0)
|
%
|
Oil Sales Volumes
(Bcfe)
|
|
0.1
|
|
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
Condensate Sales
Volumes (Bcfe)
|
|
0.7
|
|
|
1.6
|
|
|
(56.3)
|
%
|
|
0.7
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
95.0
|
|
|
97.5
|
|
|
(2.6)
|
%
|
|
101.3
|
|
|
(6.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
Production (MMcfe)
|
|
1,055.8
|
|
|
1,071.0
|
|
|
|
|
1,100.7
|
|
|
|
|
1Other
Sales Volumes: primarily related to shallow oil and gas production
and the Chattanooga shale in Tennessee.
|
2NGLs,
oil and Condensate are converted to Mcfe at the rate of one
barrel equals six Mcf based upon the approximate relative energy
content of oil and natural gas, which is not indicative of the
relationship of oil, NGLs, condensate, and natural gas
prices.
|
E&P PRICE AND COST DATA PER MCFE — Quarter-to-Quarter
Comparison:
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
(Per Mcfe)
|
|
March 31,
2017
|
|
March 31,
2016
|
|
December 31,
2016
|
Average Sales Price -
Gas
|
|
$
|
3.18
|
|
|
$
|
1.83
|
|
|
$
|
2.22
|
|
Average (Loss) Gain
on Commodity Derivative Instruments - Cash Settlement-
Gas
|
|
$
|
(0.55)
|
|
|
$
|
0.98
|
|
|
$
|
0.46
|
|
Average Sales Price -
Oil*
|
|
$
|
7.40
|
|
|
$
|
5.14
|
|
|
$
|
6.93
|
|
Average Sales Price -
NGLs*
|
|
$
|
4.86
|
|
|
$
|
2.05
|
|
|
$
|
3.40
|
|
Average Sales Price -
Condensate*
|
|
$
|
5.64
|
|
|
$
|
2.44
|
|
|
$
|
5.14
|
|
|
|
|
|
|
|
|
Average Sales Price -
Total Company
|
|
$
|
2.85
|
|
|
$
|
2.73
|
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
|
$
|
0.23
|
|
|
$
|
0.28
|
|
|
$
|
0.22
|
|
Production, Ad
Valorem, and Other Fees
|
|
0.09
|
|
|
0.09
|
|
|
0.07
|
|
Transportation,
Gathering and Compression
|
|
0.99
|
|
|
0.96
|
|
|
0.93
|
|
Depreciation,
Depletion and Amortization
|
|
1.01
|
|
|
1.08
|
|
|
1.05
|
|
Total Production
Costs
|
|
$
|
2.32
|
|
|
$
|
2.41
|
|
|
$
|
2.27
|
|
|
|
|
|
|
|
|
Margin
|
|
$
|
0.53
|
|
|
$
|
0.32
|
|
|
$
|
0.50
|
|
|
*Oil,
NGLs, and Condensate are converted to Mcfe at the rate of one
barrel equals six Mcf based upon the approximate relative energy
content of oil and natural gas, which is not indicative of the
relationship of oil, NGLs, condensate, and natural gas
prices.
|
Note: "Total
Production Costs" excludes Selling, General, and Administration and
Other Corporate Expenses.
|
The average sales price of $2.85
per Mcfe, when combined with unit costs of $2.32 per Mcfe, resulted in a margin of
$0.53 per Mcfe. This was an increase
when compared to the year-earlier quarter, due to improvements in
both average sales price and unit costs.
Marketing Update:
For the first quarter of 2017, CONSOL's average sales price for
natural gas, natural gas liquids (NGL), oil, and condensate was
$2.85 per Mcfe. CONSOL's average
price for natural gas was $3.18 per
Mcf for the quarter and, including cash settlements from hedging,
was $2.63 per Mcf. Excluding hedging,
the average realized price for all liquids for the first quarter of
2017 was $29.72 per barrel, an
increase of 39% from the previous quarter.
CONSOL's weighted average differential from NYMEX in the first
quarter of 2017 was ($0.30) per
MMBtu. With an improved Henry Hub price coupled with an improved
differential, CONSOL's average sales price for natural gas before
hedging improved 43% to $3.18 per
Mcf, compared to the average sales price of $2.22 per Mcf in the fourth quarter of 2016.
During the quarter, CONSOL executed on its strategy to add firm
transportation capacity while avoiding expensive, long-term
contracts. Specifically, CONSOL executed large-volume sales with
two customers served on East Tennessee Natural Gas Pipeline
("ETNG"). These sales meet three marketing priorities. First,
the deals complement the company's hedging program by providing a
protection of physical basis in an illiquid, premium market for
over three years, beginning in April of 2017. Next, the
pricing structures for both deals provide value above the pool
sales on Columbia Gas Transmission where much of the gas flowed
prior to certain system enhancements. Finally, both deals
utilize the customers' firm transportation capacity, at no cost to
CONSOL, thereby allowing CONSOL to forego the renewal of certain
firm transportation obligations on ETNG.
CONSOL continued to recover and sell discretionary ethane during
the quarter. Directly-marketed ethane volumes were 367,000 barrels
in the first quarter of 2017 and yielded a weighted average sales
price in excess of Mont Belvieu ethane and $1.15 per MMBtu higher than CONSOL's residue
natural gas alternative.
E&P Division Guidance:
CONSOL Energy is increasing its E&P Division production
guidance for 2017 and 2018 to approximately 420-440 Bcfe and
490-520 Bcfe, respectively, compared to previous guidance of 415
Bcfe and 485 Bcfe. The increase in production guidance is driven
primarily by two factors: improved cycle times resulting in more
production over a longer period of time, and type curve
optimization in the Morris and Switz operating areas through
changes to the production protocol resulting in holding production
flatter for a longer period of time. The increase in production
assumes no change to previously announced total E&P capital
expenditures in 2017 and 2018 of approximately $555 and $600
million, respectively.
CONSOL Energy continued its programmatic hedge program to
further build out NYMEX and basis hedges through 2021. Total hedged
natural gas production in the 2017 second quarter is 76.1 Bcf. The
annual gas hedge position is shown in the table below:
|
|
2017
|
|
|
2018
|
|
Volumes Hedged (Bcf),
as of 4/18/17
|
|
312.4*
|
|
283.2
|
|
|
|
|
|
*Includes
actual settlements of 97.8 Bcf.
|
|
|
|
|
CONSOL Energy's hedged gas volumes include a combination of
NYMEX financial hedges and index (NYMEX and basis) hedges and
contracts. In addition, to protect the NYMEX hedge volumes from
basis exposure, CONSOL enters into basis-only financial hedges and
physical sales with fixed basis at certain sales points. CONSOL
Energy's gas hedge position is shown in the table below:
|
|
Q2
2017
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
NYMEX Only
Hedges
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
68.0
|
|
|
279.9
|
|
|
276.4
|
|
|
194.9
|
|
|
117.2
|
|
Average Prices
($/Mcf)
|
|
$
|
3.18
|
|
|
$
|
3.17
|
|
|
$
|
3.17
|
|
|
$
|
3.07
|
|
|
$
|
3.11
|
|
Index Hedges and
Contracts
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
8.1
|
|
|
32.5
|
|
|
6.8
|
|
|
12.8
|
|
|
7.7
|
|
Average Prices
($/Mcf)
|
|
$
|
3.19
|
|
|
$
|
3.18
|
|
|
$
|
2.61
|
|
|
$
|
2.51
|
|
|
$
|
2.46
|
|
Total Volumes
Hedged (Bcf)
|
|
76.1
|
|
|
312.4
|
|
|
283.2
|
|
|
207.7
|
|
|
124.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX + Basis
(fully-covered volumes)1
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
71.1
|
|
|
307.2
|
|
|
253.8
|
|
|
170.0
|
|
|
109.8
|
|
Average Prices
($/Mcf)
|
|
$
|
2.59
|
|
|
$
|
2.61
|
|
|
$
|
2.86
|
|
|
$
|
2.81
|
|
|
$
|
2.85
|
|
NYMEX Only Hedges
Exposed to Basis
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
5.0
|
|
|
5.2
|
|
|
29.4
|
|
|
37.7
|
|
|
15.1
|
|
Average Prices
($/Mcf)
|
|
$
|
3.18
|
|
|
$
|
3.17
|
|
|
$
|
3.17
|
|
|
$
|
3.07
|
|
|
$
|
3.11
|
|
Total Volumes
Hedged (Bcf)
|
|
76.1
|
|
|
312.4
|
|
|
283.2
|
|
|
207.7
|
|
|
124.9
|
|
|
1Includes
physical sales with fixed basis in Q2 2017, 2017, 2018, 2019, and
2020 of 14.0 Bcf, 62.1 Bcf, 95.3 Bcf, 82.6 Bcf, and 48.7 Bcf,
respectively.
|
During the first quarter of 2017, CONSOL Energy added additional
NYMEX natural gas hedges of 60.6 Bcf, 40.0 Bcf, 32.5 Bcf, and 13.8
Bcf for 2018, 2019, 2020, and 2021, respectively. To help mitigate
basis exposure on NYMEX hedges, in the first quarter CONSOL added
29.2 Bcf, 76.9 Bcf, 66.5 Bcf, 55.9 Bcf, and 25.0 Bcf of basis
hedges for 2017, 2018, 2019, 2020, and 2021, respectively.
Pennsylvania (PA) Mining
Operations Division:
CONSOL Energy's PA Mining Operations sold 6.8 million tons in
the 2017 first quarter, compared to 5.3 million tons during the
year-earlier quarter. During the quarter, the average cost of coal
sold increased to $34.52 per ton,
compared to $33.16 per ton in the
year-earlier quarter due to the mobilization of additional
resources for the development of longwall panels, demanding
geological conditions at Enlow Fork mine, and increased equipment
maintenance.
First Quarter Operations Summary:
CNX Coal Resources LP ("CNXC") reported the following in its
first quarter 2017 earnings press release, dated May 1, 2017: "In spite of another mild winter,
our coal sales improved substantially during the first quarter
compared to the year-ago period, as higher natural gas prices and
more normal coal inventory levels supported improved demand from
our domestic power plant customers. Based on our updated coal sales
guidance range, we are approximately 95% contracted for 2017 and
64% contracted for 2018. We believe our contracted position is
well-balanced in hedging against market downside risk while
allowing us to continue to build out the portfolio strategically
and opportunistically as the market evolves."
During the quarter, on a total consolidated basis, PA Mining
Operations Division generated $123
million of cash flow before capital expenditures.
PA MINING OPERATIONS RESULTS - Quarter-To-Quarter
Comparison
|
|
PA Mining
Ops
|
|
PA Mining
Ops
|
|
PA Mining
Ops
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
March
31,
|
|
March
31,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
Beginning Inventory
(millions of tons)
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
Coal Production
(millions of tons)
|
|
6.9
|
|
|
5.4
|
|
|
7.1
|
|
Ending Inventory
(millions of tons)
|
|
0.3
|
|
|
0.3
|
|
|
0.2
|
|
Sales - Company
Produced (millions of tons)
|
|
6.8
|
|
|
5.3
|
|
|
7.1
|
|
|
|
|
|
|
|
|
Sales Per
Ton
|
|
$
|
46.80
|
|
|
$
|
42.99
|
|
|
$
|
45.05
|
|
|
|
|
|
|
|
|
Average Cost of Coal
Sold Per Ton
|
|
$
|
34.52
|
|
|
$
|
33.16
|
|
|
$
|
33.90
|
|
|
|
|
|
|
|
|
Average Margin Per
Ton Sold
|
|
$
|
12.28
|
|
|
$
|
9.83
|
|
|
$
|
11.15
|
|
Addback: DD&A Per
Ton
|
|
$
|
5.77
|
|
|
$
|
6.45
|
|
|
$
|
5.70
|
|
Average Margin Per
Ton, before DD&A
|
|
$
|
18.05
|
|
|
$
|
16.28
|
|
|
$
|
16.85
|
|
Cash Flow before Cap.
Ex ($ MM)
|
|
$
|
123
|
|
|
$
|
86
|
|
|
$
|
120
|
|
|
Note: The PA
Mining Operations include Bailey, Enlow Fork, and Harvey mines.
Total Production Costs per Ton include: operating and other costs,
royalty and production taxes and depreciation, depletion and
amortization. Sales tons times Average Margin Per Ton, before
DD&A is meant to approximate the amount of cash generated by PA
Mining Operations. This cash generation will be offset by
maintenance of production (MOP) capital expenditures. Table may not
sum due to rounding.
|
CONSOL Energy now expects total consolidated PA Mining
Operations annual sales to be approximately 25.6-27.6 million tons
for 2017, compared to previous guidance of 26.0 million tons. Also,
CONSOL Energy updates expected total consolidated capital
expenditures for PA Mining Operations to be $120-$136 million for 2017, compared to previous
guidance of $135 million.
2017 EBITDA Guidance by Segment:
(in
millions)
|
|
E&P
Division1
|
|
PA Mining
Operations Division
|
|
Other
|
|
Total
|
Earnings Before
Interest, Taxes and DD&A (EBITDA)
|
|
$
|
705
|
|
|
$
|
410
|
|
|
$
|
(20)
|
|
|
$
|
1,095
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Unrealized
Loss/(Gain) on Commodity Derivative Instruments
|
|
(150)
|
|
|
-
|
|
|
-
|
|
|
(150)
|
|
Stock-Based
Compensation
|
|
20
|
|
|
10
|
|
|
-
|
|
|
30
|
|
Adjusted
EBITDA
|
|
$
|
575
|
|
|
$
|
420
|
|
|
$
|
(20)
|
|
|
975
|
|
Noncontrolling
Interest
|
|
-
|
|
|
$
|
(50)
|
|
|
-
|
|
|
(50)
|
|
Adjusted EBITDA
Attributable to CNX
|
|
$
|
575
|
|
|
$
|
370
|
|
|
$
|
(20)
|
|
|
$
|
925
|
|
|
Note: CONSOL Energy
is unable to provide a reconciliation of projected Adjusted EBITDA
to projected operating income, the most comparable financial
measure calculated in accordance with GAAP, due to the unknown
effect, timing and potential significance of certain income
statement items. EBITDA guidance based on the midpoint of
production guidance and assumes NYMEX as of 4/4/2017 of $3.40 +
weighted average basis of ($0.29) per MMBtu on open
volumes.
|
1Includes
forecasted Earnings of Equity Affiliates of $40 million in 2017
associated with CONSOL Energy's proportionate share of ownership in
CONE Midstream Partners. This income is reflected within
Miscellaneous Other Income in the CNX income statement.
|
Liquidity:
As of March 31, 2017, CONSOL
Energy had $1,721.4 million in total
liquidity, which is comprised of $54.7
million of cash, excluding the CNXC cash balance, and
$1,666.7 million available to be
borrowed under its $2.0 billion bank
facility. In addition, CONSOL holds 16.6 million CNXC limited
partnership units, including 3.9 million class A preferred units,
with an aggregated current market value of approximately
$252 million and 21.7 million CONE
Midstream Partners LP ("CNNX") limited partnership units with a
current market value of approximately $461
million, in each case as of April 21,
2017.
CONSOL's net leverage ratio, using bank methodology, at the end
of the quarter was 3.9x, a reduction from 4.4x at year-end.
Improving financial performance from operations along with free
cash flow generation and debt reduction drove the decrease in
leverage.
About CONSOL
CONSOL Energy Inc. (NYSE: CNX) is
a Pittsburgh-based energy producer, and one of the largest
independent natural gas exploration, development and production
companies, with operations centered in the major shale formations
of the Appalachian basin. The company deploys an organic growth
strategy focused on developing its substantial resource base. As
of December 31, 2016, CONSOL Energy had 6.3 trillion
cubic feet equivalent of proved natural gas reserves. CONSOL
Energy is a member of the Standard & Poor's Midcap 400
Index. Additional information may be found at
www.consolenergy.com.
Non-GAAP Financial Measures
Definition: EBIT is
defined as earnings before deducting net interest expense (interest
expense less interest income) and income taxes. EBITDA is
defined as earnings before deducting net interest expense (interest
expense less interest income), income taxes and depreciation,
depletion and amortization. Adjusted EBITDA is defined as
EBITDA after adjusting for the discrete items listed below.
Although EBIT, EBITDA, and Adjusted EBITDA are not measures of
performance calculated in accordance with generally accepted
accounting principles, management believes that they are useful to
an investor in evaluating CONSOL Energy because they are widely
used to evaluate a company's operating performance. Investors
should not view these metrics as a substitute for measures of
performance that are calculated in accordance with generally
accepted accounting principles. In addition, because all
companies do not calculate EBIT, EBITDA, or Adjusted EBITDA
identically, the presentation here may not be comparable to
similarly titled measures of other companies.
Reconciliation of EBIT, EBITDA and Adjusted EBITDA to financial
net income attributable to CONSOL Energy Shareholders is as follows
(dollars in 000):
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
2016
|
Dollars in
thousands
|
|
E&P
Division
|
|
PA Mining
Operations Division
|
|
Other1
|
|
Total
Company
|
|
Total
Company
|
Net (Loss)
Income
|
|
$
|
(93,502)
|
|
|
$
|
61,015
|
|
|
$
|
(1,015)
|
|
|
$
|
(33,502)
|
|
|
$
|
(96,458)
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Loss from
Discontinued Operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,167
|
|
Add: Interest
Expense
|
|
621
|
|
|
2,297
|
|
|
41,515
|
|
|
44,433
|
|
|
49,865
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(1,543)
|
|
|
(1,543)
|
|
|
(214)
|
|
Add: Income
Taxes
|
|
—
|
|
|
—
|
|
|
(53,789)
|
|
|
(53,789)
|
|
|
(23,800)
|
|
Earnings Before
Interest & Taxes (EBIT)
|
|
(92,881)
|
|
|
63,312
|
|
|
(14,832)
|
|
|
(44,401)
|
|
|
(17,440)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
95,348
|
|
|
42,301
|
|
|
11,104
|
|
|
148,753
|
|
|
154,988
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before
Interest, Taxes and DD&A (EBITDA) from Continuing
Operations
|
|
$
|
2,467
|
|
|
$
|
105,613
|
|
|
$
|
(3,728)
|
|
|
$
|
104,352
|
|
|
$
|
137,548
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Unrealized (Gain)
Loss on Commodity Derivative Instruments
|
|
(24,640)
|
|
|
—
|
|
|
—
|
|
|
(24,640)
|
|
|
29,271
|
|
Impairment of E&P
Properties
|
|
137,865
|
|
|
—
|
|
|
—
|
|
|
137,865
|
|
|
—
|
|
Loss on Sale of
Gathering Pipeline
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,636
|
|
Severance
Expense
|
|
162
|
|
|
—
|
|
|
68
|
|
|
230
|
|
|
2,918
|
|
Other Transaction
Fees
|
|
—
|
|
|
—
|
|
|
5,316
|
|
|
5,316
|
|
|
—
|
|
Gain on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
(822)
|
|
|
(822)
|
|
|
—
|
|
Total Pre-tax
Adjustments
|
|
113,387
|
|
|
—
|
|
|
4,562
|
|
|
117,949
|
|
|
44,825
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA from
Continuing Operations
|
|
$
|
115,854
|
|
|
$
|
105,613
|
|
|
$
|
834
|
|
|
$
|
222,301
|
|
|
$
|
182,373
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
|
—
|
|
|
5,464
|
|
|
—
|
|
|
5,464
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Attributable to Continuing Operations
|
|
$
|
115,854
|
|
|
$
|
100,149
|
|
|
$
|
834
|
|
|
$
|
216,837
|
|
|
$
|
181,259
|
|
|
Note: Income
tax effect of Total Pre-tax Adjustments was $40,884 and $10,310 for
the three months ended March 31, 2017 and March 31, 2016,
respectively. Adjusted net income attributable to CONSOL Energy
Shareholders for the three months ended March 31, 2017 is
calculated as GAAP net loss attributable to CONSOL Energy
Shareholders of $38,966 plus total pre-tax adjustments from the
above table of $117,949, less the associated tax expense of $40,884
equals the adjusted net income attributable to CONSOL Energy
Shareholders of $38,099.
|
1CONSOL
Energy's Other Division includes expenses from various other
corporate and diversified business unit activities including legacy
liabilities costs and income tax expense that are not allocated to
E&P or PA Mining Operations Divisions.
|
Free cash flow and organic free cash flow from continuing
operations are non-GAAP financial measures. Management believes
that these measures are meaningful to investors because management
reviews cash flows generated from operations and non-core asset
sales after taking into consideration capital expenditures due to
the fact that these expenditures are considered necessary to
maintain and expand CONSOL's asset base and are expected to
generate future cash flows from operations. It is important to note
that free cash flow and organic free cash flow from continuing
operations do not represent the residual cash flow available for
discretionary expenditures since other non-discretionary
expenditures, such as mandatory debt service requirements, are not
deducted from the measure.
Organic Cash
Flow from Continuing Operations
|
Three Months
Ended
March 31, 2017
|
Net Cash Provided by
Continuing Operations
|
$
|
205,194
|
|
|
|
Capital
Expenditures
|
(112,978)
|
|
Net Distributions
from Equity Affiliates
|
5,909
|
|
Organic Free Cash
Flow from Continuing Operations
|
$
|
98,125
|
|
|
|
Free Cash
Flow
|
Three Months
Ended
March 31, 2017
|
Net Cash Provided by
Operating Activities
|
$
|
205,119
|
|
|
|
Capital
Expenditures
|
(112,978)
|
|
Net Distributions
from Equity Affiliates
|
5,909
|
|
Proceeds From Sales
of Assets
|
19,427
|
|
Free Cash
Flow
|
$
|
117,477
|
|
Cautionary Statements
Various statements in this release, including those that express
a belief, expectation or intention, may be considered
forward-looking statements under federal securities laws including
Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act") that involve risks and uncertainties that could cause actual
results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The forward-looking
statements may include projections and estimates concerning the
timing and success of specific projects and our future production,
revenues, income and capital spending. When we use the words
"believe," "intend," "expect," "may," "should," "anticipate,"
"could," "estimate," "plan," "predict," "project," "will," or their
negatives, or other similar expressions, the statements which
include those words are usually forward-looking statements. When we
describe strategy that involves risks or uncertainties, we are
making forward-looking statements. The forward-looking statements
in this press release, if any, speak only as of the date of this
press release; we disclaim any obligation to update these
statements. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. These risks, contingencies and
uncertainties relate to, among other matters, the following:
deterioration in economic conditions in any of the industries in
which our customers operate may decrease demand for our products,
impair our ability to collect customer receivables and impair our
ability to access capital; prices for natural gas, natural gas and
other liquids and coal are volatile and can fluctuate widely based
upon a number of factors beyond our control including oversupply
relative to the demand available for our products, weather and the
price and availability of alternative fuels; an extended decline in
the prices we receive for our natural gas, natural gas liquids and
coal affecting our operating results and cash flows; foreign
currency fluctuations could adversely affect the competitiveness of
our coal and natural gas liquids abroad; our customers extending
existing contracts or entering into new long-term contracts for
coal on favorable terms; our reliance on major customers; our
inability to collect payments from customers if their
creditworthiness declines or if they fail to honor their contracts;
the disruption of rail, barge, gathering, processing and
transportation facilities and other systems that deliver our
natural gas, natural gas liquids and coal to market; a loss of our
competitive position because of the competitive nature of the
natural gas and coal industries, or a loss of our competitive
position because of overcapacity in these industries impairing our
profitability; coal users switching to other fuels in order to
comply with various environmental standards related to coal
combustion emissions; the impact of potential, as well as any
adopted environmental regulations including any relating to
greenhouse gas emissions on our operating costs as well as on the
market for natural gas and coal and for our securities; the risks
inherent in natural gas and coal operations, including our reliance
upon third party contractors, being subject to unexpected
disruptions, including geological conditions, equipment failure,
timing of completion of significant construction or repair of
equipment, fires, explosions, accidents and weather conditions
which could impact financial results; decreases in the availability
of, or increases in, the price of commodities or capital equipment
used in our mining and transportation operations; obtaining and
renewing governmental permits and approvals for our natural gas and
coal operations; the effects of government regulation on the
discharge into the water or air, and the disposal and clean-up of,
hazardous substances and wastes generated during our natural gas
and coal operations; our ability to find adequate water sources for
our use in natural gas drilling, or our ability to dispose of water
used or removed from strata in connection with our natural gas
operations at a reasonable cost and within applicable environmental
rules; the effects of stringent federal and state employee health
and safety regulations, including the ability of regulators to shut
down our operations; the potential for liabilities arising from
environmental contamination or alleged environmental contamination
in connection with our past or current natural gas and coal
operations; the effects of mine closing, reclamation, gas well
closing and certain other liabilities; uncertainties in estimating
our economically recoverable natural gas, oil and coal reserves;
defects may exist in our chain of title and we may incur additional
costs associated with perfecting title for natural gas and coal
rights on some of our properties or failing to acquire these
additional rights may result in a reduction of our estimated
reserves; the outcomes of various legal proceedings, which are more
fully described in our reports filed under the Securities Exchange
Act of 1934; exposure to employee-related long-term liabilities;
acquisitions and divestitures we anticipate may not occur or
produce anticipated benefits; our participation in joint ventures
may restrict our operational and corporate flexibility, and actions
taken by a joint venture partner may impact our financial position
and operational results; risks associated with our debt; replacing
our natural gas and oil reserves, which if not replaced, will cause
our natural gas and oil reserves and production to decline;
declines in our borrowing base could occur for a variety of
reasons, including lower natural gas or oil prices, declines in
natural gas and oil proved reserves, and lending regulations
requirements or regulations; our hedging activities may prevent us
from benefiting from near-term price increases and may expose us to
other risks; changes in federal or state income tax laws,
particularly in the area of percentage depletion and intangible
drilling costs, could cause our financial position and
profitability to deteriorate; failure to appropriately allocate
capital and other resources among our strategic opportunities may
adversely affect our financial condition; failure by Murray Energy
to satisfy liabilities it acquired from us, or failure to perform
its obligations under various arrangements, which we guaranteed,
could materially or adversely affect our results of operations,
financial position, and cash flows; information theft, data
corruption, operational disruption and/or financial loss resulting
from a terrorist attack or cyber incident; operating in a single
geographic area; certain provisions in our multi-year coal sales
contracts may provide limited protection during adverse economic
conditions, and may result in economic penalties or permit the
customer to terminate the contract; a majority of our common units
in CNX Coal Resources LP and CONE Midstream Partners LP are
subordinated, and we may not receive distributions from CNX Coal
Resources LP or CONE Midstream Partners LP; with respect to the
sale of the Buchanan and Amonate mines and other coal assets to
Coronado IV LLC - disruption to our business, including customer,
employee and supplier relationships resulting from this
transaction, and the impact of the transaction on our future
operating results; there is no assurance that the potential
dropdowns, spin-off or sale of the coal business will occur, or if
it does occur that we will be able to negotiate favorable terms;
with respect to the termination of the joint venture with Noble -
disruption to our business, including customer and supplier
relationships resulting from this transaction, and the impact of
the transaction on our future operating and financial results and
liquidity; other factors discussed in the 2016 Form 10-K under
"Risk Factors," as updated by any subsequent Form 10-Qs, which are
on file at the Securities and Exchange Commission.
The SEC permits oil and gas companies, in their filings with the
SEC, to disclose only proved, probable, and possible oil and gas
reserves that a company anticipates as of a given date to be
economically and legally producible and deliverable by application
of development projects to known accumulations. We may use certain
terms in this press release, such as EUR (estimated ultimate
recovery), unproved reserves and total resource potential, that the
SEC's rules strictly prohibit us from including in filings with the
SEC. These measures are by their nature more speculative than
estimates of reserves prepared in accordance with SEC definitions
and guidelines and accordingly are less certain. We also note that
the SEC strictly prohibits us from aggregating proved, probable and
possible reserves in filings with the SEC due to the different
levels of certainty associated with each reserve category.
This announcement does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities of CNX Coal
Resources LP.
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(Dollars in
thousands, except per share data)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Revenues and Other
Income:
|
2017
|
|
2016
|
Natural Gas, NGLs and
Oil Sales
|
$
|
317,763
|
|
|
$
|
181,255
|
|
(Loss) Gain on
Commodity Derivative Instruments
|
(22,463)
|
|
|
55,060
|
|
Coal Sales
|
316,448
|
|
|
226,164
|
|
Other Outside
Sales
|
13,053
|
|
|
7,766
|
|
Purchased Gas
Sales
|
8,979
|
|
|
8,618
|
|
Freight-Outside
Coal
|
12,282
|
|
|
13,110
|
|
Miscellaneous Other
Income
|
40,696
|
|
|
48,131
|
|
Gain (Loss) on Sale
of Assets
|
11,951
|
|
|
(7,276)
|
|
Total Revenue and
Other Income
|
698,709
|
|
|
532,828
|
|
Costs and
Expenses:
|
|
|
|
Exploration and
Production Costs
|
|
|
|
Lease Operating
Expense
|
21,633
|
|
|
27,739
|
|
Transportation,
Gathering and Compression
|
94,332
|
|
|
93,974
|
|
Production, Ad
Valorem, and Other Fees
|
9,329
|
|
|
8,303
|
|
Depreciation,
Depletion and Amortization
|
95,348
|
|
|
105,715
|
|
Exploration and
Production Related Other Costs
|
9,786
|
|
|
1,747
|
|
Purchased Gas
Costs
|
8,895
|
|
|
7,868
|
|
Other Corporate
Expenses
|
17,930
|
|
|
22,798
|
|
Impairment of
Exploration and Production Properties
|
137,865
|
|
|
—
|
|
Selling, General, and
Administrative Costs
|
21,490
|
|
|
22,458
|
|
Total Exploration
and Production Costs
|
416,608
|
|
|
290,602
|
|
PA Mining
Operations Costs
|
|
|
|
Operating and Other
Costs
|
199,815
|
|
|
154,101
|
|
Depreciation,
Depletion and Amortization
|
42,301
|
|
|
41,266
|
|
Freight
Expense
|
12,282
|
|
|
13,110
|
|
Selling, General, and
Administrative Costs
|
14,868
|
|
|
5,776
|
|
Total PA Mining
Operations Costs
|
269,266
|
|
|
214,253
|
|
Other
Costs
|
|
|
|
Miscellaneous
Operating Expense
|
43,200
|
|
|
35,339
|
|
Selling, General, and
Administrative Costs
|
2,211
|
|
|
1,853
|
|
Depreciation,
Depletion and Amortization
|
11,104
|
|
|
8,007
|
|
Gain on Debt
Extinguishment
|
(822)
|
|
|
—
|
|
Interest
Expense
|
44,433
|
|
|
49,865
|
|
Total Other
Costs
|
100,126
|
|
|
95,064
|
|
Total Costs And
Expenses
|
786,000
|
|
|
599,919
|
|
Loss From
Continuing Operations Before Income Tax
|
(87,291)
|
|
|
(67,091)
|
|
Income Tax
Benefit
|
(53,789)
|
|
|
(23,800)
|
|
Loss From
Continuing Operations
|
(33,502)
|
|
|
(43,291)
|
|
Loss From
Discontinued Operations, net
|
—
|
|
|
(53,167)
|
|
Net
Loss
|
(33,502)
|
|
|
(96,458)
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
5,464
|
|
|
1,114
|
|
Net Loss
Attributable to CONSOL Energy Shareholders
|
$
|
(38,966)
|
|
|
$
|
(97,572)
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (CONTINUED)
|
|
(Dollars in
thousands, except per share data)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Loss Per
Share
|
2017
|
|
2016
|
Basic
|
|
|
|
Loss from Continuing
Operations
|
$
|
(0.17)
|
|
|
$
|
(0.19)
|
|
Loss from
Discontinued Operations
|
—
|
|
|
(0.24)
|
|
Total Basic Loss
Per Share
|
$
|
(0.17)
|
|
|
$
|
(0.43)
|
|
Dilutive
|
|
|
|
Loss from Continuing
Operations
|
$
|
(0.17)
|
|
|
$
|
(0.19)
|
|
Loss from
Discontinued Operations
|
—
|
|
|
(0.24)
|
|
Total Dilutive
Loss Per Share
|
$
|
(0.17)
|
|
|
$
|
(0.43)
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
|
—
|
|
|
$
|
0.0100
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
Three Months
Ended
|
(Dollars in
thousands)
|
March
31,
|
(Unaudited)
|
2017
|
|
2016
|
Net Loss
|
$
|
(33,502)
|
|
|
$
|
(96,458)
|
|
Other Comprehensive
Income (Loss):
|
|
|
|
Actuarially
Determined Long-Term Liability Adjustments (Net of tax: ($2,052),
$682)
|
3,502
|
|
|
(2,484)
|
|
Reclassification of Cash Flow Hedges from OCI to Earnings (Net of
tax: $5,624)
|
—
|
|
|
(9,814)
|
|
|
|
|
|
Other Comprehensive
Income (Loss)
|
3,502
|
|
|
(12,298)
|
|
|
|
|
|
Comprehensive
Loss
|
(30,000)
|
|
|
(108,756)
|
|
|
|
|
|
Less: Comprehensive
Income Attributable to Noncontrolling Interests
|
5,452
|
|
|
1,114
|
|
|
|
|
|
Comprehensive Loss
Attributable to CONSOL Energy Inc. Shareholders
|
$
|
(35,452)
|
|
|
$
|
(109,870)
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands)
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
61,266
|
|
|
$
|
60,475
|
|
Accounts and Notes
Receivable:
|
|
|
|
Trade
|
215,329
|
|
|
220,222
|
|
Other
Receivables
|
100,949
|
|
|
69,901
|
|
Inventories
|
69,618
|
|
|
65,461
|
|
Recoverable Income
Taxes
|
124,555
|
|
|
116,851
|
|
Prepaid
Expenses
|
44,498
|
|
|
93,146
|
|
Current Assets of
Discontinued Operations
|
—
|
|
|
83
|
|
Total Current
Assets
|
616,215
|
|
|
626,139
|
|
Property, Plant and
Equipment:
|
|
|
|
Property, Plant and
Equipment
|
13,518,261
|
|
|
13,771,388
|
|
Less—Accumulated
Depreciation, Depletion and Amortization
|
5,695,342
|
|
|
5,630,949
|
|
Property, Plant and
Equipment of Assets Held for Sale, Net
|
163,622
|
|
|
—
|
|
Total Property,
Plant and Equipment—Net
|
7,986,541
|
|
|
8,140,439
|
|
Other
Assets:
|
|
|
|
Deferred Income
Taxes
|
44,174
|
|
|
4,290
|
|
Investment in
Affiliates
|
197,385
|
|
|
190,964
|
|
Other
|
219,454
|
|
|
222,149
|
|
Total Other
Assets
|
461,013
|
|
|
417,403
|
|
TOTAL
ASSETS
|
$
|
9,063,769
|
|
|
$
|
9,183,981
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands, except per share data)
|
March 31,
2017
|
|
December 31,
2016
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$
|
270,739
|
|
|
$
|
241,616
|
|
Current Portion of
Long-Term Debt
|
11,851
|
|
|
12,000
|
|
Other Accrued
Liabilities
|
704,367
|
|
|
680,348
|
|
Current Liabilities
of Discontinued Operations
|
5,892
|
|
|
6,050
|
|
Total Current
Liabilities
|
992,849
|
|
|
940,014
|
|
Long-Term
Debt:
|
|
|
|
Long-Term
Debt
|
2,620,698
|
|
|
2,722,995
|
|
Capital Lease
Obligations
|
36,596
|
|
|
39,074
|
|
Total Long-Term
Debt
|
2,657,294
|
|
|
2,762,069
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
Postretirement
Benefits Other Than Pensions
|
656,890
|
|
|
659,474
|
|
Pneumoconiosis
Benefits
|
107,792
|
|
|
108,073
|
|
Mine
Closing
|
224,055
|
|
|
218,631
|
|
Gas Well
Closing
|
224,588
|
|
|
223,352
|
|
Workers'
Compensation
|
66,429
|
|
|
67,277
|
|
Salary
Retirement
|
108,485
|
|
|
112,543
|
|
Other
|
119,048
|
|
|
151,660
|
|
Total Deferred
Credits and Other Liabilities
|
1,507,287
|
|
|
1,541,010
|
|
TOTAL
LIABILITIES
|
5,157,430
|
|
|
5,243,093
|
|
Stockholders'
Equity:
|
|
|
|
Common Stock, $.01
Par Value; 500,000,000 Shares Authorized, 230,034,586 Issued and
Outstanding at March 31, 2017; 229,443,008 Issued and Outstanding
at December 31, 2016
|
2,304
|
|
|
2,298
|
|
Capital in Excess of
Par Value
|
2,467,996
|
|
|
2,460,864
|
|
Preferred Stock,
15,000,000 shares authorized, None issued and
outstanding
|
—
|
|
|
—
|
|
Retained
Earnings
|
1,682,545
|
|
|
1,727,789
|
|
Accumulated Other
Comprehensive Loss
|
(389,042)
|
|
|
(392,556)
|
|
Total CONSOL
Energy Inc. Stockholders' Equity
|
3,763,803
|
|
|
3,798,395
|
|
Noncontrolling
Interest
|
142,536
|
|
|
142,493
|
|
TOTAL
EQUITY
|
3,906,339
|
|
|
3,940,888
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
9,063,769
|
|
|
$
|
9,183,981
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
|
|
(Dollars in
thousands)
|
Common
Stock
|
|
Capital in
Excess
of Par
Value
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total CONSOL
Energy Inc. Stockholders' Equity
|
|
Non-
Controlling
Interest
|
|
Total
Equity
|
December 31,
2016
|
$
|
2,298
|
|
|
$
|
2,460,864
|
|
|
$
|
1,727,789
|
|
|
$
|
(392,556)
|
|
|
$
|
3,798,395
|
|
|
$
|
142,493
|
|
|
$
|
3,940,888
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
—
|
|
|
—
|
|
|
(38,966)
|
|
|
—
|
|
|
(38,966)
|
|
|
5,464
|
|
|
(33,502)
|
|
Other Comprehensive
Income (Loss) (Net of ($2,052) Tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
3,514
|
|
|
3,514
|
|
|
(12)
|
|
|
3,502
|
|
Comprehensive (Loss)
Income
|
—
|
|
|
—
|
|
|
(38,966)
|
|
|
3,514
|
|
|
(35,452)
|
|
|
5,452
|
|
|
(30,000)
|
|
Issuance of Common
Stock
|
6
|
|
|
488
|
|
|
—
|
|
|
—
|
|
|
494
|
|
|
—
|
|
|
494
|
|
Treasury Stock
Activity
|
—
|
|
|
—
|
|
|
(6,278)
|
|
|
—
|
|
|
(6,278)
|
|
|
—
|
|
|
(6,278)
|
|
Amortization of
Stock-Based Compensation Awards
|
—
|
|
|
6,644
|
|
|
—
|
|
|
—
|
|
|
6,644
|
|
|
58
|
|
|
6,702
|
|
Distributions to
Noncontrolling Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,467)
|
|
|
(5,467)
|
|
Balance at March
31, 2017
|
$
|
2,304
|
|
|
$
|
2,467,996
|
|
|
$
|
1,682,545
|
|
|
$
|
(389,042)
|
|
|
$
|
3,763,803
|
|
|
$
|
142,536
|
|
|
$
|
3,906,339
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Dollars in
thousands)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Cash Flows from
Operating Activities:
|
2017
|
|
2016
|
Net Loss
|
$
|
(33,502)
|
|
|
$
|
(96,458)
|
|
Adjustments to
Reconcile Net Loss to Net Cash Provided By Operating
Activities:
|
|
|
|
Net Loss from
Discontinued Operations
|
—
|
|
|
53,167
|
|
Depreciation,
Depletion and Amortization
|
148,753
|
|
|
154,988
|
|
Impairment of
Exploration and Production Properties
|
137,865
|
|
|
—
|
|
Stock-Based
Compensation
|
6,702
|
|
|
5,624
|
|
(Gain) Loss on Sale
of Assets
|
(11,951)
|
|
|
7,276
|
|
Gain on Debt
Extinguishment
|
(822)
|
|
|
—
|
|
Loss (Gain) on
Commodity Derivative Instruments
|
22,463
|
|
|
(55,060)
|
|
Net Cash (Paid)
Received in Settlement of Commodity Derivative
Instruments
|
(47,103)
|
|
|
84,331
|
|
Deferred Income
Taxes
|
(41,936)
|
|
|
(23,582)
|
|
Equity in Earnings of
Affiliates
|
(12,330)
|
|
|
(16,665)
|
|
Return on Equity
Investment
|
—
|
|
|
4,512
|
|
Changes in Operating
Assets:
|
|
|
|
Accounts and Notes
Receivable
|
(27,908)
|
|
|
(14,833)
|
|
Inventories
|
(4,315)
|
|
|
(18,458)
|
|
Prepaid
Expenses
|
870
|
|
|
18,980
|
|
Changes in Other
Assets
|
936
|
|
|
(9,864)
|
|
Changes in Operating
Liabilities:
|
|
|
|
Accounts
Payable
|
4,016
|
|
|
(8,316)
|
|
Accrued
Interest
|
34,411
|
|
|
35,867
|
|
Other Operating
Liabilities
|
28,151
|
|
|
1,379
|
|
Changes in Other
Liabilities
|
(10,036)
|
|
|
(3,313)
|
|
Other
|
10,930
|
|
|
4,087
|
|
Net Cash Provided by
Continuing Operating Activities
|
205,194
|
|
|
123,662
|
|
Net Cash (Used in)
Provided by Discontinued Operating Activities
|
(75)
|
|
|
6,290
|
|
Net Cash Provided by
Operating Activities
|
205,119
|
|
|
129,952
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(112,978)
|
|
|
(77,656)
|
|
Proceeds from Sales
of Assets
|
19,427
|
|
|
8,453
|
|
Net Distributions
from (Investments in) Equity Affiliates
|
5,909
|
|
|
(5,578)
|
|
Net Cash Used in
Continuing Investing Activities
|
(87,642)
|
|
|
(74,781)
|
|
Net Cash Provided by
Discontinued Investing Activities
|
—
|
|
|
395,757
|
|
Net Cash (Used in)
Provided by Investing Activities
|
(87,642)
|
|
|
320,976
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Payments on
Short-Term Borrowings
|
—
|
|
|
(100,500)
|
|
Payments on
Miscellaneous Borrowings
|
(2,942)
|
|
|
(2,095)
|
|
Payments on Long-Term
Notes
|
(98,243)
|
|
|
—
|
|
Net (Payments on)
Proceeds from Revolver - CNX Coal Resources LP
|
(4,000)
|
|
|
15,000
|
|
Distributions to
Noncontrolling Interest
|
(5,467)
|
|
|
(5,413)
|
|
Dividends
Paid
|
—
|
|
|
(2,294)
|
|
Issuance of Common
Stock
|
494
|
|
|
3
|
|
Treasury Stock
Activity
|
(6,278)
|
|
|
(1,510)
|
|
Debt Repurchase and
Financing Fees
|
(250)
|
|
|
—
|
|
Net Cash Used in
Continuing Financing Activities
|
(116,686)
|
|
|
(96,809)
|
|
Net Cash Used in
Discontinued Financing Activities
|
—
|
|
|
(47)
|
|
Net Cash Used in
Financing Activities
|
(116,686)
|
|
|
(96,856)
|
|
Net Increase in Cash
and Cash Equivalents
|
791
|
|
|
354,072
|
|
Cash and Cash
Equivalents at Beginning of Period
|
60,475
|
|
|
72,574
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
61,266
|
|
|
$
|
426,646
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/consol-energy-reports-first-quarter-results-increased-2017-and-2018-production-guidance-to-420-440-bcfe-and-490-520-bcfe-respectively-closed-on-sale-of-assets-totaling-108-million-to-date-300448963.html
SOURCE CONSOL Energy Inc.