Consol Energy Inc.'s (CNX) board of directors approved capital
spending of $1 billion for this year, unchanged from 2009, with 40%
of that earmarked for its natural gas operations, where the company
expects to see more growth potential.
The coal producer said $400 million of the budgeted amount is
earmarked to its CNX Gas Corp. (CXG) unit and will be split evenly
between its shale and coalbed methane drilling programs. The single
largest program consists of $160 million in the Marcellus Shale,
for which the company expects to sign a contract for a second
flexible horizontal rig effective Mar. 1.
Consol Chief Executive J. Brett Harvey said, "In looking beyond
2010, I believe that spending on coal will migrate to maintenance
of production levels, while gas will likely be the growth vehicle.
While a lot can happen between now and 2011, I currently envision
that coal capital will be lower in 2011, while gas spending will be
higher."
The company last month unveiled plans to idle some of its coal
operations after permits were suspended following environmental
challenges to mountaintop coal mining. The coal industry also faces
pressure from the government's debate over regulation of carbon
emissions.
Consol Energy shares closed Thursday at $49.80 and didn't trade
premarket. The stock rose 55% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com