CONSOL Energy Inc. (CNX, Financial) filed Quarterly Report for the period ended 2012-03-31.
Consol Energy has a market cap of $7.56 billion; its shares were traded at around $33.07 with a P/E ratio of 12.7 and P/S ratio of 1.2. The dividend yield of Consol Energy stocks is 1.5%. Consol Energy had an annual average earning growth of 23.3% over the past 10 years. GuruFocus rated Consol Energy the business predictability rank of 2.5-star.
CBM sales revenues were $100 million for the three months ended March 31, 2012 compared to $115 million for the three months ended March 31, 2011. The $15 million decrease was primarily due to a 14.1% decrease in average sales price per thousand cubic feet sold, offset, in part, by a 1.3% increase in average volumes sold. The decrease in CBM average sales price is the result of lower general market prices for natural gas, offset, in part, by various gas swap transactions maturing in each period. The gas swap transactions qualify as financial cash flow hedges that exist parallel to the underlying physical transactions. These financial hedges represented approximately 11.4 billion cubic feet of our produced CBM gas sales volumes for the three months ended March 31, 2012 at an average price of $5.63 per thousand cubic feet. In the three months ended March 31, 2011, these financial hedges represented 11.8 billion cubic feet at an average price of $5.62 per thousand cubic feet. CBM sales volumes increased 0.3 billion cubic feet primarily due to additional wells coming on-line from our on-going drilling program, offset, in part, by a decrease in volumes related to the Buchanan longwall being idled.
Shallow Oil and Gas sales revenues were $34 million for the three months ended March 31, 2012 compared to $38 million for the three months ended March 31, 2011. The $4 million decrease was primarily due to the 7.3% decrease in volumes sold. Shallow Oil and Gas sales volumes decreased 0.6 billion cubic feet for the three months ended March 31, 2012 compared to the 2011 period primarily due to normal well declines without a corresponding increase in wells drilled. The focus of the gas division is to develop the Marcellus and Utica acreage. Average sales price decreased primarily due to lower general market prices of natural gas in the period-to-period comparison. This decrease was partially offset by the result of various gas swap transactions that matured in the three months ended March 31, 2012. These gas swap transactions qualify as financial cash flow hedges that exist parallel to the underlying physical transactions. These financial hedges represented approximately 4.1 billion cubic feet of our produced Shallow Oil and Gas gas sales volumes for the three months ended March 31, 2012 at an average price of $5.22 per thousand cubic feet. There were no Shallow Oil and Gas gas swap transactions that occurred in the three months ended March 31, 2011.
Other income was $16 million for the three months ended March 31, 2012 compared to $1 million for the three months ended March 31, 2011. The $15 million increase was due to $8 million of interest income in the current period due to notes receivable from Noble related to the September 2011 joint venture agreement, a $6 million increase in gain on sale of miscellaneous assets and a $1 million increase in equity in earnings of affiliates.
CNX Gas's $1.0 billion Senior Secured Credit Agreement expires April 12, 2016. CNX Gas' credit facility allows for up to $1.0 billion for borrowings and letters of credit. CNX Gas can request an additional $250 million increase in the aggregate borrowing limit amount. Fees and interest rate spreads are based on the percentage of facility utilization, measured quarterly. The facility includes a minimum interest coverage ratio covenant of no less than 3.00 to 1.00, measured quarterly. The minimum interest coverage ratio covenant is calculated as the ratio of EBITDA to cash interest expense for CNX Gas and its subsidiaries. The interest coverage ratio was 35.79 to 1.00 at March 31, 2012. The facility also includes a maximum leverage ratio covenant of no more than 3.50 to 1.00, measured quarterly. The maximum leverage ratio covenant is calculated as the ratio of financial covenant debt to twelve-month trailing EBITDA for CNX Gas and its subsidiaries. Financial covenant debt is comprised of the outstanding indebtedness and letters of credit, less cash on hand, for CNX Gas and its subsidiaries. EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, gains and losses on the sale of assets, uncommon gains and losses, gains and losses on discontinued operations and includes cash distributions received from affiliates plus pro-rata earnings from material acquisitions. The leverage ratio was 0.00 to 1.00 at March 31, 2012. Covenants in the facility limit CNX Gas' ability to dispose of assets, make investments, pay dividends and merge with another company. The credit facility allows unlimited investments in joint ventures for the development and operation of gas gathering systems and provides for $600,000 of loans, advances and dividends from CNX Gas to CONSOL Energy. Investments in the CONE Gathering Company are unrestricted. At March 31, 2012, the facility had no amounts drawn and $70 million of letters of credit outstanding, leaving $930 million of unused capacity.
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Consol Energy has a market cap of $7.56 billion; its shares were traded at around $33.07 with a P/E ratio of 12.7 and P/S ratio of 1.2. The dividend yield of Consol Energy stocks is 1.5%. Consol Energy had an annual average earning growth of 23.3% over the past 10 years. GuruFocus rated Consol Energy the business predictability rank of 2.5-star.
Highlight of Business Operations:
Low volatile metallurgical coal revenue was $173 million for the three months ended March 31, 2012 compared to $237 million for the three months ended March 31, 2011. The $64 million decrease was attributable to the 0.4 million ton decrease in sales tons, offset, in part, by a $2.16 per ton increase in average sales price. CONSOL Energy priced 0.8 million tons of low volatile metallurgical coal in the export market at an average sales price of $163.74 per ton for the three months ended March 31, 2012 compared to 1.2 million tons at an average price of $167.52 per ton for the three months ended March 31, 2011. Produced low volatile metallurgical coal inventory was 0.2 million tons at March 31, 2012 and 2011.CBM sales revenues were $100 million for the three months ended March 31, 2012 compared to $115 million for the three months ended March 31, 2011. The $15 million decrease was primarily due to a 14.1% decrease in average sales price per thousand cubic feet sold, offset, in part, by a 1.3% increase in average volumes sold. The decrease in CBM average sales price is the result of lower general market prices for natural gas, offset, in part, by various gas swap transactions maturing in each period. The gas swap transactions qualify as financial cash flow hedges that exist parallel to the underlying physical transactions. These financial hedges represented approximately 11.4 billion cubic feet of our produced CBM gas sales volumes for the three months ended March 31, 2012 at an average price of $5.63 per thousand cubic feet. In the three months ended March 31, 2011, these financial hedges represented 11.8 billion cubic feet at an average price of $5.62 per thousand cubic feet. CBM sales volumes increased 0.3 billion cubic feet primarily due to additional wells coming on-line from our on-going drilling program, offset, in part, by a decrease in volumes related to the Buchanan longwall being idled.
Shallow Oil and Gas sales revenues were $34 million for the three months ended March 31, 2012 compared to $38 million for the three months ended March 31, 2011. The $4 million decrease was primarily due to the 7.3% decrease in volumes sold. Shallow Oil and Gas sales volumes decreased 0.6 billion cubic feet for the three months ended March 31, 2012 compared to the 2011 period primarily due to normal well declines without a corresponding increase in wells drilled. The focus of the gas division is to develop the Marcellus and Utica acreage. Average sales price decreased primarily due to lower general market prices of natural gas in the period-to-period comparison. This decrease was partially offset by the result of various gas swap transactions that matured in the three months ended March 31, 2012. These gas swap transactions qualify as financial cash flow hedges that exist parallel to the underlying physical transactions. These financial hedges represented approximately 4.1 billion cubic feet of our produced Shallow Oil and Gas gas sales volumes for the three months ended March 31, 2012 at an average price of $5.22 per thousand cubic feet. There were no Shallow Oil and Gas gas swap transactions that occurred in the three months ended March 31, 2011.
Other income was $16 million for the three months ended March 31, 2012 compared to $1 million for the three months ended March 31, 2011. The $15 million increase was due to $8 million of interest income in the current period due to notes receivable from Noble related to the September 2011 joint venture agreement, a $6 million increase in gain on sale of miscellaneous assets and a $1 million increase in equity in earnings of affiliates.
CNX Gas's $1.0 billion Senior Secured Credit Agreement expires April 12, 2016. CNX Gas' credit facility allows for up to $1.0 billion for borrowings and letters of credit. CNX Gas can request an additional $250 million increase in the aggregate borrowing limit amount. Fees and interest rate spreads are based on the percentage of facility utilization, measured quarterly. The facility includes a minimum interest coverage ratio covenant of no less than 3.00 to 1.00, measured quarterly. The minimum interest coverage ratio covenant is calculated as the ratio of EBITDA to cash interest expense for CNX Gas and its subsidiaries. The interest coverage ratio was 35.79 to 1.00 at March 31, 2012. The facility also includes a maximum leverage ratio covenant of no more than 3.50 to 1.00, measured quarterly. The maximum leverage ratio covenant is calculated as the ratio of financial covenant debt to twelve-month trailing EBITDA for CNX Gas and its subsidiaries. Financial covenant debt is comprised of the outstanding indebtedness and letters of credit, less cash on hand, for CNX Gas and its subsidiaries. EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, gains and losses on the sale of assets, uncommon gains and losses, gains and losses on discontinued operations and includes cash distributions received from affiliates plus pro-rata earnings from material acquisitions. The leverage ratio was 0.00 to 1.00 at March 31, 2012. Covenants in the facility limit CNX Gas' ability to dispose of assets, make investments, pay dividends and merge with another company. The credit facility allows unlimited investments in joint ventures for the development and operation of gas gathering systems and provides for $600,000 of loans, advances and dividends from CNX Gas to CONSOL Energy. Investments in the CONE Gathering Company are unrestricted. At March 31, 2012, the facility had no amounts drawn and $70 million of letters of credit outstanding, leaving $930 million of unused capacity.
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