Jan 14 Coal miner Consol Energy Inc expects capital budget for the year to be lower by about 12 percent and said a majority of the spending would be directed towards its gas operations.
Consol, which set a capital budget of $1.29 billion to $1.50 billion for 2013, expects to invest $835 million to $865 million this year after raking in an estimated $455-$640 million from asset sales.
The company said it does not expect to invest in major coal projects once it completes its BMX Longwall mine in Western Pennsylvania. The mine is scheduled for completion during the first quarter of 2014.
Consol sees annual coal investments approaching maintenance-of-production levels of $5 to $6 per ton in 2014 and beyond. The company's capital budget for 2012 was $1.7 billion.
The company, which also operates natural gas wells in the Marcellus Shale region of the Northeastern United States, expects gas production to rise between 8 percent and 15 percent this year due to the increased investment.
Damp demand from China, weak prices and escalating operating costs are adding to troubles at U.S. coal companies, which have taken a hit as an increasing number of power companies replace thermal coal with cheaper natural gas.
Rival Peabody Energy Corp said last month that it would halve its capital spending for 2013 due to weak prices and sales.