CONSOL Energy Inc the leading diversified fuel producer in the Eastern United States reported net income for the quarter ended December 31st 2011 of USD 196 million as compared to USD 104 million from the year earlier quarter. Record net income for 2011 was USD 632 million as compared to USD 347 million for 2010.
The company set other annual records in 2011, including:
1. Record gas production of 153.5 Bcf (net to CONSOL), an increase of 20% from the 127.9 Bcf produced in 2010. Gas production in 2011 would have been approximately 160 Bcf, or a 25% increase, had the company not sold assets to Noble Energy and Antero Resources during the year.
2. Record overseas coal sales of 11.4 million tons, an increase of 68% from the 6.8 million tons sold overseas in 2010.
3. Record sales revenue of USD 5.7 billion, an increase of 14% from the USD 5.0 billion in 2010.
4. Record cash flow from operations of USD 1.5 billion, an increase of 36% from the USD 1.1 billion in 2010.
5. Baltimore Terminal shipped a record 12.6 million tons in 2011, besting the 1995 shipments of 12.4 million tons.
Mr J Brett Harvey chairman and CEO said that "CONSOL Energy has a world class set of assets. In our Coal Division for 2011, we were able to combine reliable operations with astute marketing to generate record net income. Our record results were even more impressive when one realizes that, on the gas side, weakening gas prices throughout 2011 largely offset our record gas production. For CONSOL, 2011 was a year characterized by our ability to seize opportunities and, in some cases, to create opportunities."
Strategically, CONSOL Energy was successful in participating in the growth of world coal markets and in selling more of its crossover coal into lucrative met coal markets. CONSOL's coal is currently being sold on four continents.
In gas, the company formed one strategic partnership with Noble Energy, Inc. to jointly develop 628,000 acres in the Marcellus Shale, and a second partnership with Hess Corporation to explore for and develop oil, liquids, and gas on 200,000 acres of Utica Shale in Ohio. The two partnerships, along with the sale of an overriding royalty interest to Antero generated gross proceeds to CONSOL Energy of USD 841 million in 2011, and are expected to generate proceeds and carry of nearly USD 3.3 billion in the coming years.
The influx of cash from the gas transactions, along with the record cash flow from operations in 2011 of USD 1.5 billion, considerably strengthened the company's financial position during a time of economic uncertainty. During 2011, the company extended and expanded its revolvers, paid off all of its short term debt, and ended the year with a cash balance of USD 376 million. With 2011 capital expenditures of USD 1.4 billion and dividends paid of USD 96 million, the company was slightly cash flow positive, even before considering the proceeds received from the gas transactions. In response to the improved financial condition, CONSOL Energy's Board of Directors increased the regular quarterly dividend by 25%, with the annual dividend now set at USD 0.50 per share.
