* First-quarter profit $0.50/share vs est. $0.19/share
* Revenue up 15 pct, exploration, production sales up 58 pct
* Expects higher natural gas production in second quarter
* Shares rise as much as 5 pct
(Adds analyst estimates, comments; updates shares)
April 29 Consol Energy Inc plans to ramp
up its natural gas output in the second quarter, after a 59
percent jump in sales of oil and gas helped the company report a
better-than-expected quarterly profit.
The coal and gas producer's shares rose as much as 5 percent
to a more than two-year high of $44.00 in early trading.
Consol, which plans to become an exploration and production
company with a coal subsidiary, expects natural gas production
to rise as much as 35 percent to 50-52 billion cubic feet
equivalent (bcfe) in the current quarter.
The company plans to spend 75 percent of its 2014 capital
budget of $1.5 billion on gas production.
Consol is making a big push into oil and gas production as
its coal mining operations continue to be weighed down by weak
prices for steel-making, or metallurgical, coal.
However, the company said on Tuesday that it expects a pick
up in pricing and demand for thermal coal, used in power
Low coal and gas inventories, weak hydro-electric output,
and higher natural gas prices were pushing up contracts for
thermal coal, Consol said.
The company raised its forecast for thermal coal sales to
25.3 million tons from 23.8 million tons.
However, the company cut its sales forecast for steel-making
coal to 3.6-4.2 million tons from 4.2-4.7 million tons and said
it was cutting production at its Buchanan Mine in Virginia.
"Though it is unfortunate that Consol's Buchanan mine may
run less than flat out, we believe this to be a more-or-less
expected turn of events given the current market environment and
more lasting decisions being made by the company's met coal
producing peers," Brean Capital analyst Lucas Pipes wrote in a
note to clients.
Bigger rival Peabody Energy Corp said last week that
it was reviewing some of its higher-cost operations, while
Walter Energy Inc has said it would idle its Canadian
mines and temporarily lay off about 700 employees.
Weak prices for steel-making coal dragged down Consol's
total coal sales by 2.4 percent to $534.7 million in the first
quarter ended March 31.
However, the weak prices were more than offset by a rise in
natural gas prices and lower costs.
Consol said natural gas output rose 23 percent in the first
quarter, while average sales price rose by $1.22 per thousand
cubic feet equivalent.
The company reported net income of $116 million, or 50 cents
per share, in the first quarter, compared with a net loss of
$1.8 million, or 1 cent per share, a year earlier.
Revenue rose 15 percent to $969.2 million.
The average analyst estimate was for a profit of 19 cents
per share on revenue of $889.94 million, according to Thomson
(Reporting By Kanika Sikka and Sneha Banerjee in Bangalore;
Editing by Maju Samuel and Sriraj Kalluvila)