Consol Energy, EQT faced tough quarter
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The two major Marcellus Shale energy companies headquartered in the area -- Consol Energy and EQT Corp. -- both posted a year-over-year drop in third quarter earnings on Thursday.
Consol Energy posted a net loss of $11 million, or 5 cents per diluted share, for the third quarter, down from the profit of $167 million and 73 cents reported last year -- and the first quarterly net loss for the company since 2007.
Total revenue for the quarter ended Sept. 30 was $1.16 billion, down from the $1.52 billion of the same quarter in 2011. Consol shares closed Thursday at $34.42, down 21 cents.
The Cecil-based coal and natural gas firm warned investors earlier this month to expect a loss because of planned and unplanned coal mine idlings.
On Thursday, the company revealed just how much money is thought to have been lost as a result of some of the idlings. Conveyor belt malfunctions in July that temporarily idled four longwall mines slashed an estimated $53 million from the company's third-quarter income. The mines with the broken belts are now operating at 60 percent capacity, and are expected to be at full operation levels in the fourth quarter.
Consol also voluntarily reduced production at its flagship Buchanan mine during the third quarter, saying the company did not want to sell coal at a time when export markets like Europe and Brazil have decreased demand. The company said it doesn't plan on investing in new coal expansion projects until markets improve.
Meanwhile, Consol's production in the Marcellus Shale natural gas formation during the third quarter increased 16 percent to 10.1 billion cubic feet.
The area's other driller, Downtown-based EQT Corp., posted a third-quarter profit of $31.9 million, or 21 cents per diluted share, down from $67.6 million, or 45 cents, in the same quarter one year ago.
The gas company also announced third-quarter revenues of $364 million, up about $1.5 million from 2011. In comparing the recently ended quarter's earnings to the third quarter of 2011, the company has excluded income earned by the selling of its Big Sandy pipeline for $390 million last year.
EQT drilled 30 wells in the Marcellus formation during the third quarter, and is on track for a year-end total of 132. The average well had a horizontal drill length of 5,820 feet.
In the third quarter, the company produced 68.2 billion cubic feet of gas, a year-over-year increase of 33 percent. In offering preliminary guidance to investors, EQT said it expects 2013 gas production to be 30 percent more than 2012's forecast. EQT shares closed Thursday at $60.72, up $2.74.
First Published October 26, 2012 12:00 am