The producer said its board of directors has approved a total capital budget of $US1.7 billion, up from $1.4 billion. Of that, $720 million has been earmarked for coal, while $755 will go towards its gas arm, $135 million is sectioned off for water and the remaining $110 million will be for other projects.
Within its coal business, Consol said it expects to invest $205 million for projects such as the BMX mine, which is on track with an ongoing expansion effort that will add 5 million tons of production of the Pittsburgh 8 seam coal annually for the high-vol and thermal markets.
Another $155 million will be used for efficiency improvements, including an overland belt project at the Enlow Fork operation. Health and safety items will take $50 million of the budget and the largest portion, $310 million, has been earmarked for maintenance-of-production projects.
One portfolio item to be scaled back this year is Consol’s coalbed methane program, which will include just 86 wells this year with total capital estimated to be $65 million.
“This budget reflects our desire to create shareholder value by investing in our highest rate of return projects: our organic opportunities in coal, gas, and liquids,” chairman and chief executive officer J Brett Harvey said.
“We are, however, entering a year with an unusual amount of uncertainty. We have the ability to adjust our investment, should circumstances warrant.”
Consol operates 12 bituminous coal mining complexes in four US states and has a total proven and probable coal reserve base of 4.4 billion tons.