The results represent a step change in performance the company predicted would occur in the fourth quarter, according to Consol chief Brett Harvey.

"Our results in the December 2004 quarter are evidence of both the short term earnings power of the company and the robust longer term outlook for Consol Energy," he said.

The results are attributable to the higher pricing environment - coal prices improved 13.5% - and greater production volumes for the company’s coal and gas output.

Following a major expansion effort greater coal volumes and the availability of all of Consol’s 13 longwalls, 28.9% more coal came on-stream than a year ago. In addition, costs per ton were lower. Coal production for the quarter was 19.2 million tons and the average realised price was $31.70 or 13.5%.

"Our fourth quarter performance allowed us to meet virtually all of our targeted results for the year and produced one of the best quarters we have had since becoming a public company in 1999," Harvey said.

The increase in production reflects the resumption of production at the Loveridge Mine in March 2004. In October, the company began producing coal from the Miller Creek complex in Mingo County, West Virginia. The expansion of the McElroy mine was also completed following the startup of an additional longwall. McElroy, Enlow Fork, and Bailey mines each have two longwall mining systems.

"Based on our mining plans, I don't expect that we will mine as much coal in any quarter in 2005 as we did in the fourth quarter of 2004," Harvey added. "But our expansion of capacity last year means we expect to have consistent volumes throughout 2005 and full year production volumes in 2005 that I expect to exceed 2004."

During the quarter the company accelerated approximately $32 million of depreciation and amortization for equipment and facilities at the Rend Lake Mine in Illinois, and other mines that had been on long-term idle status.

The expansion of the Bailey preparation plant, which processes coal from both the Bailey and Enlow Fork mines, has also been completed. This increases capacity from approximately 20 million clean tons per year to 24 million tons.

"We expect this to be a very good year," said Harvey. "We expect coal in Northern Appalachia and Central Appalachia to be in tight supply, coal inventories at power plants and at mines to be at the lowest levels in many years and, as a result, the pricing environment is expected to continue to improve."

Coal production in 2005 is forecast to increase from 2004 levels, primarily reflecting the benefit of a full year's production from the expansion program. Loveridge, McElroy mines and the Bailey/Enlow Fork complex will be the major drivers of increased output though additional production from Miller Creek and Emery mines is expected.