Citing continued efforts to rebalance its portfolio, the company said Monday that its capex budget for the year would be $US1.29 to $1.5 billion, approximately 11.5% lower than 2012.
Taking into account the sale of assets it made over the past year, moves yielding $455-$640 million, Consol said it would have a net investment of $835 million to $865 million over the course of the year.
CNX, Consol’s gas division, will spend $835 million to $935 million to expand its operations during 2013. But the producer’s coal arm will spend much less, between $410 million and $520 million.
The only planned significant coal project this year, the company said, was continued work at the BMX longwall operation in western Pennsylvania. That effort should be completed in the first quarter of next year.
Because of this, Consol said it anticipated annual coal investments would approach maintenance-of-production levels of $5 to $6 per ton in 2014 and beyond.
“Our net investment in 2013 reflects both our ability to invest in our organic growth opportunities in coal, gas, and liquids while selling assets that have more value to others," chairman and chief executive officer J Brett Harvey said.
“We have some flexibility in our 2013 investment plan, in both coal and gas.”
On the coal operations side, Consol said it would invest $318 million for combined maintenance-of-production projects across its portfolio. Aside from $166 million of planned earmarks for BMX, it will also spend $80 million on the overland conveyor project at Enlow Fork.
At it awaits the 5 million tons per annum that the newly expanded BMX complex will bring it in 2014, the company worked over the last year to contract and pay significant deposits to secure replacement longwall shields at three of its mines and new shields at BMX.
“The company is nearing the end of a process to fund this capital commitment in a $205 million operating lease in 2013,” Harvey said, noting that the amount has been netted from its expected coal operations capital expenditures.
Consol issued its projections Monday in advance of its final quarter earnings conference, scheduled for January 31.
In all, Consol holds 12 bituminous coal mining complexes in four US states and has proven and probable coal reserves totalling 4.4Bt.
