For the past three years, CONSOL Energy kept its natural gas production rather flat. It couldn’t decided whether to focus on growing its gas and coal business. That will change this year as it invests more than $1 billion to push its gas production up by 30%. That is a growth rate that the company plans on keeping at least through 2016.
The decision to transition from a diversified natural gas and coal producer to a natural gas growth company wasn’t an easy one to make. However, with the sale of some of its legacy coal assets in West Virginia, CONSOL Energy chose to become a natural gas growth company. Now, with the release of its 2014 capital spending plans, we have greater detail on how it plans to achieve that gas-fueled growth.
The mighty Marcellus
Most of CONSOL’s capital will be spent in the Marcellus Shale in 2014. About $410 million will be spent on the liquids-rich portion of the play while another $415 million will be spent in the dry gas areas. It is also important to note that the company has a joint venture with Noble Energy, in the Marcellus. Because of this, CONSOL might see $220 million coming back to it as part of the drilling carry it has with Noble Energy. That carry is currently suspended due to low natural gas prices. However, as prices picked up, it’s possible that the company will earn that carry in 2014.
Read more: http://www.dailyfinance.com/2014/01/22/consol-energy-inc-is-ready-to-turn-on-the-gas/