Jan 21 Consol Energy Inc said it would spend three-quarters of its nearly $1.5 billion capital budget for 2014 on natural gas production amid regulatory uncertainty for the coal industry.
Consol, which has said it wants to transition into a exploration and production company with a coal subsidiary, will mainly invest to drill and complete projects in the highly productive Marcellus and Utica shales.
The company said on Tuesday most of the $1.5 billion would come from the low-growth, coal assets it sold in 2013.
Consol said in October it would sell five West Virginia coal mines, which comprised roughly half its coal production, for $850 million cash and $184 million in future royalty payments for its coal reserves.
Coal producers have come under increased regulatory pressure in the past five years from the Obama administration, making the industry unpopular.
Consol said it expected its coal business to support the exploration and production capital program when the BMX longwall in Western Pennsylvania starts late in the first quarter.
The Canonsburg, Pennsylvania-based company reaffirmed its 2014 natural gas production growth target of 30 percent. The company expects to produce 215-235 billions of cubic feet equivalent of gas during the year.
The company will report results for the quarter ended Dec. 31 on Jan. 31.