Profit at Consol's natural gas division plummets
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Softened demand for coal and low natural gas prices over the past quarter were reflected in the earnings report issued by Consol Energy this morning, but the Cecil-based energy firm still reported profit of $153 million, or 67 cents per diluted share, up from $77 million and 34 cents one year ago.
Cost-cutting and the selling this year of some company assets worth $224 million in cash helped provide the boost in income, while revenue for the second quarter fell to $1.45 billion from the $1.58 billion reported in 2011.
The company's coal division reflected the tough times seen across an industry competing with low natural gas and weakened international demand.
The average realized price per ton of coal for Consol was $66, down $8.63 from one year ago. The company's cost per ton fell to $52.23, a decrease of $1.17 per ton from the previous quarter.
The company's gas division reported decreases in coalbed methane and shallow well production, but an increase of 16 percent in its Marcellus Shale production.
Low natural gas prices have forced companies to curtail drilling projections or more rigs to more lucrative parts of the formation. The profit for Consol's gas division this quarter was $800,000, a decrease from the $17.1 million of last year.
"While there's no doubt that CONSOL and the coal and domestic natural gas industries face strong headwinds, we think it prudent to continue to invest in our core businesses to position CONSOL to capture value for our shareholders when the upcycle occurs," Consol chairman and chief executive officer J. Brett Harvey said in a statement.
First Published July 26, 2012 8:53 am