Current CNX Stock Info

CONSOL Energy (ticker: CNX), a Pittsburgh based coal mining and natural gas exploration company plans to split the corporation into two separate companies, one focusing on natural gas exploration and production, the other focusing on coal mining.

The company’s Pennsylvania Mining Complex, which is comprised of the Bailey, Enlow Fork, and Harvey mines as well as a coal preparation plant, its interest in CNX Coal Resources LP, its coal export terminal in the Port of Baltimore and its coal reserves and assets will be under the ownership of CONSOL’s coal spinoff, uncoupled from the natural gas business.

CONSOL’s natural gas business

CONSOL’s natural gas division is active in multiple regions, including the Marcellus and Utica—where it holds 412,763 and 377,817 net acres, respectively. The company also holds significant acreage in coal-bed methane plays, where it has 2,162,718 net acres. Without specifying where, company also indicated that it holds 1,363,555 net acres in various other gas-producing areas.

CONSOL Energy Breaking into Separate Coal and Nat. Gas Companies

Source: CONSOL Energy

Between all of its natural gas producing assets, CONSOL estimates that it has approximately 6.251 Tcfe in proved natural gas reserves. The company is producing this out of 12,876 net producing wells, which include any oil producing and so-called ‘gob’ wells. Gob wells are those that produce methane out of coal-mining locations wherein the mine roof has collapsed, after mining operations have ceased.

In its first quarter of 2017, CONSOL Energy reported that it produced 95.0 Bcfe out of its various gas assets, the majority of which was sourced from the Marcellus—which contributed 52.9 Bcfe. The company’s average Q1 production was 1,055.8 Mmcfe per day.

During Q1, the company drilled a total of nine wells, completed 11, and turned in line 6 wells. During 2018, CONSOL hopes to drill between 20 and 25 wells, and turn in line between 25 and 30 wells within its Utica and Marcellus acreage.

CONSOL’s spinoff comes at a time when coal-based electricity generation is decreasing and natural-gas based electricity generation is increasing.

CONSOL Energy Breaking into Separate Coal and Nat. Gas Companies

Source: EIA


CONSOL Energy found its beginning in 1864 as the Consolidation Coal Company. It had its entrance into natural gas production between 1992 and 1999, when it started monetizing the methane that it removed from its mines for safety reasons. This expanded further with the formation of CONSOL’s CNX Gas company, and the purchase of Dominion Resources’ Appalachian assets.

The company’s transition away from coal and to natural gas production was gradual, and began with the sale of its subsidiary Consolidation Coal Company to Murray Energy Corporation, in 2013.

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